Central Bank argues for tax reformation

August 30, 2011 7:30 AM

The governments from Curaçao and St. Maarten are to provide more clarity and decisiveness with regard to their policy agendas, according to the annual report from the Central Bank of Curaçao and St. Maarten.

The Central Bank is of the opinion that both countries should provide more clarity on the reformation of the tax system because it’s policy inconsistencies and uncertainties in particular that injure the trust of investors.

Naturally, both Curaçao and St. Maarten must reform the tax system to guarantee healthy public finances, according to the Central Bank. This adjustment must have the basic principle to realize an adequate income basis that can finance the government expenditures. Simultaneously, the revision of the tax system must focus on stimulating economic growth. For this reason, tax tariffs, especially those of the direct taxes, must be lowered to reduce the economic disruptions caused by the tax system. “Lower tariffs will also make our economies more attractive in relation to other countries, in particular the Caribbean region. Moreover, the system of taxes must be simplified, more transparent and customer friendly. This will make it easier to implement the system and will increase the tax morality”, according to the Central Bank. It is important for Curaçao to revise the tax system, according to the Central Bank, so it can support the economic growth better. Although both countries announced tax reformations, the implementation of such is delayed. Moreover, in their annual report on last year the Central Bank remarks the contents of the total package on tax measures is still unclear. In the case of St. Maarten, a reformation of the tax system and improvement of the tax levying is necessary to increase the income basis of the government. The latter is necessary to ensure the government has sufficient means to finance new tasks and responsibilities, which St. Maarten acquired through the new status.

29 August 2011