WILLEMSTAD — The Board for Financial Supervision (Cft) has responded to the Government of Curaçao’s first quarterly implementation report for 2025, acknowledging a budget surplus on the country’s operational account, while also raising serious concerns over lagging investments, accounting inconsistencies, and broader fiscal management issues.
According to the Cft’s letter dated June 28, 2025, Curaçao recorded a preliminary surplus of XCG 161 million in the first quarter of 2025, indicating compliance with the Kingdom Law on Financial Supervision’s central budget norm—at least for now. The full-year budget still anticipates a surplus of XCG 62 million. Cft noted that the government improved its reporting by providing expanded explanations in the quarterly report, enhancing the transparency of the island’s financial position.
Warning on Capital Investments
Despite the operational surplus, the Cft is concerned that only XCG 1 million of the budgeted XCG 204 million in investments was realized in the first quarter. This discrepancy casts doubt on the government’s ability to carry out its planned investment agenda.
The Cft urged the Ministry of Finance to assess which investments are realistically achievable in 2025 and adjust the capital budget accordingly. The underperformance in this area could undermine the government’s application for bond financing under the "lopende inschrijving" mechanism.
Tax Revenue Stable, but Revisions Needed
Curaçao collected XCG 530 million in taxes in Q1 2025, a 7% increase from the same period in 2024. However, Cft flagged inconsistencies between budget projections and actual revenues from specific tax categories. For example, wage tax and property tax collections lagged behind expectations, while corporate and transfer tax collections were higher than forecasted. Cft called for an update of the 2025 tax estimates in the upcoming budget amendment.
Financial Management Concerns
While the overall quality of reporting has improved, Cft expressed concern about Curaçao's budgeting and accountability process, noting that "Bashi" bonuses were paid out in the first quarter without prior approval from Parliament—a potential breach of budgetary procedures. Cft reminded the government that the last audited financial statements date back to 2018, and urged urgent improvements in accountability processes to uphold Parliament’s budgetary authority.
Debt and Liquidity
Curaçao’s total public debt decreased from XCG 4.144 billion at the end of 2024 to XCG 4.020 billion by the end of Q1 2025, largely due to repayments on short-term loans. The debt-to-GDP ratio now stands at 60%. Liquidity also improved, with XCG 234 million in cash reserves, although the Cft noted an earlier accounting error that had artificially inflated this number in the report.
The government is still in talks with the Netherlands regarding partial refinancing of a XCG 140 million bond set to mature in October 2025. These developments will need to be formally included in the upcoming 2025 budget amendment (OBW).
Revenue Service Reforms Underway
The letter also notes ongoing efforts to reform the Tax Receiver’s Office, following operational problems that Cft had flagged repeatedly in the past. Curaçao reported that a reform plan was submitted to SOAB (the government’s auditing agency), and progress will be tracked through internal audits.
Despite higher tax and premium collections, the Cft remains concerned about the large amount of outstanding tax debts, and has requested an action plan to address this issue.
Delays in Roadmap Projects
The Cft also reviewed the government’s “Roadmap” reform report, which outlines key improvement projects across public finance and administration. Many of the subprojects are either delayed or at risk of delay, mainly due to limited implementation capacity and ongoing difficulties in staffing key financial roles. The Cft supports the current evaluation and reprioritization of projects and urged continued dialogue on achieving a clean audit opinion on future financial statements.
Conclusion and Next Steps
Cft concluded by urging the government to submit its revised 2025 budget amendment as soon as possible, reflecting actual performance and updated projections. The board stressed that structural improvements—in investments, accountability, and fiscal forecasting—are essential for ensuring sustainable financial management.
The letter was also copied to the President of Parliament, the Prime Minister of Curaçao, and the Secretary-General of the Ministry of Finance, highlighting its significance at the highest political levels.
