Published On: Mon, Dec 29th, 2014

VBC calls attention to social security funds

Curacao statisticsWILLEMSTAD - The Curaçao Business Association (VBC) wonders how the government is going to solve the deficits in the social security funds, which could amount to 500 million guilders in 2015. Increasing social contributions is, according to the association, not a solution.

The recent external developments involving a dramatic reduction in the international prices of oil products will persist for some time, according to experts. This could possibly provide some relief, the VBC believes. “The oil bill of Curaçao was approximately 900 million in 2013. Halving this expenditure provides financial space, which, if wisely used, could contribute to help reduce the above mentioned problem.”

The VBC warns in advance that these external reliefs are not structural in nature and that the breathing space that is created, should be used to find lasting solutions to the indicated problems. “In addition, we have to take into account that there is a great risk that because of the price drops, the sales tax income will decrease.”

On the other hand, according to the VBC, there will be a hefty windfall for the consumer and business owner, who will benefit from the lower rates of oil products such as gasoline, diesel, gas and electricity. "Bearing in mind these pro’s and con’s, it could be worthwhile to examine if our proposal offers possibilities.”

The VBC also indicates that the Ministry of Economic Development expects a growth of 0.3 percent based on investments in the construction of the new hospital in Otrabanda, the tourism growth, the low inflation and the burden relief measures (fiscal plan 2015) that the government will introduce.

“The Ministry of Finance is more optimistic and expects a growth of 1.5 percent, while the Central Bank of Curaçao and Sint Maarten keeps a growth of 0.3 percent. Of course, we all hope that these predictions become real. The economy of Curaçao has a great need for sustainable growth. The promised tax relief can act as a jump start for this process.”

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