Published On: Mon, Jan 21st, 2013

Tax burden down again in 2015

WILLEMSTAD — According to independent member of Parliament Glenn Sulvaran – recommended by Minister of Finance, José Jardim – the tax burden can go down again in 2015. The extra tax burden is a result of the measures suggested to somewhat compensate the budgeted deficit of 345 million for this year. The minister stated this during the budgetary discussion in the Parliament. It will take two years before the government finances are organized again. Jardim explained the intended measures and social-economic initiatives of the government are to make the government’s financial situation healthy again and simultaneously boost the economy.

Expectations are that due to the financial measures the economy of Curaçao will decline with 2.2 percent this year and 0.6 percent in 2014. A slight growth of 1.3 percent is expected for the first time in 2015, when the tax burden can be reduced again, said Jardim.

This year the economy decline will cost 1000 to 1500 jobs but if no measures are taken now we’d face a recession of 7 percent with a loss of 5000 jobs. By investing in the continuous economic growth now a basis is laid to realize growth figures also after 2015, said Jardim.

One of the intended measures is to enforce differentiation in the sales tax (ob). The basic rate for luxury goods with a negative effect on health and environment will increase from 6 to 9 percent; an increase of 50 percent. To compensate the financially weak in the community a zero rate will be introduced for products from the basic basket. These products were first exempted from sales tax. Furthermore, the basic basket will be expanded with other products, like potatoes, baby food, eggs, fresh vegetables and fruit, flour, corn flour and rice.

With this differentiation the government will receive 17.5 million in total on sales tax this year. The minister hopes the sales tax differentiation can be enforced per March 1st.

Another measure is increasing the land-tax whereby the broader shoulders will be burdened the most again, said Jardim. The extra revenues from land-tax will be defrayed for 80 percent by owners of property exceeding 350,000 guilders. The government expects to collect 10.7 million on land-tax this year. Jardim hopes the Parliament will discuss the enactment for the land-tax increase this month.

Another measure is introducing the basic medical insurance (bvz). Also here the financially weak will be protected. Persons with an income up to 1000 guilders per month will not pay the premium or the nominal premium and will be insured for dental care and the costs of spectacles. Pensioners will pay 10 instead of 12 percent premium. The enactment to introduce the bvz was presented to the Parliament yesterday, with the hope that the insurance can be implemented on February 1st.

Dividend

As regards the government’s dividend policy, 10 million is reserved on the budget for this year, which is to come from the Refineria di Kòrsou (RdK). Meanwhile the government has begun investigating all other government nv’s. Based on the financial situation of the nv’s the government will determine if they can contribute toward the government’s purse.

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