WILLEMSTAD - Curaçao’s tax revenues have increased in recent years as a result of a more effective and better-organized Tax Department, according to researcher Wim Nijdam, who supports the department’s management on the island.

Nijdam provided a detailed explanation of the findings of a recent International Monetary Fund (IMF) study showing that countries with stronger tax administrations generate more revenue without raising tax rates.

For Curaçao, this improvement translates into a structural increase of around NAf. 18 million per year in turnover tax revenue, the study found. According to Nijdam, this progress could also have a positive impact on other taxes and social premiums collected by the government.

Performance Measured Using IMF Framework

Nijdam explained that Curaçao has, for several years, been measuring the performance of its Tax Department using the IMF’s Tax Administration Diagnostic Assessment Tool (TADAT) — a framework that evaluates 55 aspects of a country’s tax administration, from registration and filing to auditing and enforcement. Each aspect is graded on a scale from A (excellent) to D (inadequate).

More than 100 tax administrations worldwide now use this model as a performance benchmark.

Curaçao’s first TADAT assessment took place in November 2021, when the country scored an average of D+. Three years later, in October 2024, the IMF conducted a second evaluation, raising the score to C-.

Small Step, Big Impact

Although the improvement may seem modest, the IMF’s international data shows that even small gains can have major fiscal effects.

“According to the IMF, moving from a D+ to a C+ rating typically yields an additional 0.6% of GDP in turnover tax revenue,” Nijdam explained. “For Curaçao, the improvement from D+ to C- represents about 0.3% of GDP, which equals roughly 18 million guilders per year based on a national GDP of around 6 billion guilders.”

The researcher emphasized that these results demonstrate the value of investing in tax administration reforms, as better performance leads to higher and more sustainable revenues — not through higher taxes, but through greater efficiency, compliance, and accountability.

“Curaçao’s progress shows that strengthening institutions pays off,” Nijdam concluded. “A well-functioning tax department is one of the most effective tools for improving the country’s financial stability.”