Published On: Tue, Apr 23rd, 2013

Minister of Finance informs about sales tax increase

Jose JardimWILLEMSTAD – Parliament has agreed with the changes of the Law on sales tax. After a marathon session the bill was adopted by 11 votes to 10. Finance Minister, Jose Jardim has answered all questions clearly and explicitly indicated that the new bill has traveled a long road before it came to be. Before being treated in Parliament, there were various organizations consulted and also the “little man” (the less fortunate) was taken into account. The sales tax increase from six to nine percent is for luxury and unhealthy products. Other goods belonging to the basic necessities are exempted from the sales tax increase. Thus the wealthy in society contribute to the increased sales tax and the less well-off are spared. Also to the shopkeepers in downtown were taken into account and no additional sales tax were imposed on them so the preserve their competitiveness with other islands which are also depending on tourism.  The government will haul in about 16 million guilders with the increase. This is important to ensure the healthy financial situation of the country Curaçao

Minister Jardim has always indicated that the broad shoulders will have to bear this luxury tax. In comparison with the previous sales tax-increase from five to six percent, which had to be borne by the entire population, is now chosen for the protection of the less fortunate in society. Various goods and services listed as the first necessities of life are exempt from sales tax. Sales tax will not be levied from importer to the consumer for these products. The new sales tax-law will only procure for an inflation of 0.2 percent. Examples of products which are exempt from sales tax are: eggs, all kinds of rice, potatoes, corn meal, grain, flour, baby food, fresh fruits and vegetables.

The rate increase from six to nine percent sales tax contains products that are bad for the health and luxury goods such as motor vehicles, yachts and pleasure craft, alcohol, tobacco, soft drinks including fruit drinks, food sold by street vendors and in restaurants, mobile phones, computer games , weapons and ammunition, fireworks and Christmas trees. Also cinemas, fairs, expositions and exhibitions, film  rentals  and computer games and participation in lotteries and gambling. The Minister of Finance is pleased that the measures have been approved by parliament and will lead to an improved and sound financial management. This has paved the way to borrow money on the capital market and to rely on social, cultural, economic, sports, improving employment and the road network which is in a much-needed investment situation. This will benefit the economy of Curaçao.

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