Benjamin & Parker Certified Risk Auditors Innovative Tax Environment concept for the Dutch Caribbean (Part 1 of 2)

p>PHILIPSBURG:— The year 2018 brings new challenges for the Government of Aruba and Sint Maarten due to several financial conditions in which the current Government will face a very difficult task to determine the welfare of its communities. Understanding the current financial conditions on the mentioned islands, the firm will outline facts of historical taxation concepts that just did not work in the past and will not work now.
The firm compiled a sequence of events for the analysis

Former Dutch Antilles

  • In the late 80’s the Dutch Caribbean introduced the Solidarity tax, which was10% of the gross wage.
  • In the late 90’s the OB or sales tax was introduced in Curacao and Bonaire at 2% (March 1997) and was increased in October the same year to 5% meaning an increase of over 250%.
  • In the year 2000, the Federal Tax Laws were introduced, the payroll system was changed, and import duties were increased

After the Ys Government noticed that the economy got stranded they reduced the payroll tax with 15-12.5% in 2 consecutive years.
For more than 2 decades the Dutch Tax assistance was needed to improve Government Tax Revenues.

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Aruba
In the late 80’s the same solidarity tax was introduced at 8.2 for 2 years and 1 year 4.1% of the gross salary.
Progressive taxation on alcohol and other cost of living products
In the 90’s the Aruban Government came with the SAB concept, Sanering Achterstallige Belastingen), that squeezed the economy through taxations.
After this action was not enough, the Government came with a 70/30 deal, meaning is they tax payer (corporate) paid 70% of his back taxes, 30% would be exempted, but the question is what about those that paid correctly?
In the late 2000, as the tax revenues could not increase more, a special focus was directed on noncompliance of tax returns filing for example failure to file the profit tax returns will result in a fine of Afl. 5000,= which was a disproportional measure.
In the year 2004, the new Federal tax law was introduced

After approximately 3 decades of additional taxations and collections schemes, the Dutch Caribbean have the following characteristics:

  • Governments still have a deficit
  • Increasing unemployment, adding more pressure on the employed segment of the population
  • Unfriendly investment environment
  • High rate of tax evasion
  • Poor employment perspective

The fact is that 3 decades of Public Administration and no Government has been successful to address the matters effectively in the Dutch Caribbean. Benjamin & Parker will propose an alternative concept in the media this week, to create the necessary incentives to reverse the current situation. The firm hopes that politicians in the Dutch Caribbean will analyze the concept for the improvement of the Dutch Caribbean, positively.

Benjamin & Parker Press Release

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