Published On: Mon, Oct 8th, 2012

Letter to former minister of finance delineating financial chaos in Curacao

WILLEMSTAD – Finally there is proof of a letter dated June 29, 2012 were Secretary General of Finance Dr. Jose Jardim delineates the financial situation of the island to former minister of finance George Jamaloodin. This letter points out a chaotic financial situation and requested the immediate attention of the minister.

It is good to note that on various occasion the minister has denied the existence of sais letter. In this letter the head of the finance indicates another letter dated June 7, 2012 addressed to the Financial Supervision Committee (CFT) and the Prime Minister, where it gives a view on the financial reality of the island.

The head of finances indicates since June, that if there are no changes made to the current policy, it could result in a unbalanced budget, thus a deficit.

At that moment the deficit was calculated at 193 million guilders in 2012 of which 151 million were structural debt. This changes the deficit on “normal expenses” from 138.8 million calculated to 128 million structurally.

It also mentions the qualifications which Curacao has received from Standard and Poor’s. It was very clear according to the qualifications that Curacao had to comply with existing financial norms.

The letter explains that the finances of the island is in dire situation and one of the reasons is the delay in implementing the austerity measures. On top of this the government has not complied with budget rules. All this has brought a discontent in the economy and this has effect on the tax incomes for the government.

Of the 25 million in dividend forecasted, the government will get only 13 million. There is 4.2 million pending from Core N.V. and 6.7 million which SOAB, BTP&U, Post and Office of Intellectual Property and Kadaster could generate. The risk is to realize this in a structural system. To add to this problem, the public companies are not doing very well financially and it is not sure if they will be able to pay out dividend in 2013 and 2014.

Austerity measures were not implemented in the Health Sector and therefore it created a 35 million guilder gap. The numbers shows that sales tax generated from January until May 2011, 133.6 million and the same period in 2012, 150.1 million. However, 161.5 million was budgeted for 2012, so less was generated than expected.

Wages tax generated from January until May 2011, 217.1 million and the same period in 2012, 211.9 million. 209.3 was budgeted so it generated 2.6 million more.

Revenue tax generated in the same period in 2011 generated 120.8 million and in 2012, 127.3 million. 112.5 million was budgeted and therefore a surplus of 14.9 million.

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