The democratic D66 party in the Second Chamber of Dutch Parliament is not satisfied with the answers of caretaker State Secretary of Finance Frans Weekers to their questions about the consequences of the new tax regime on the economy of St. Eustatius and Saba.
“The people are feeling the consequences of the new tax regime in their wallet. They have been hit hard by the steep price increase. This is a serious matter. The State Secretary is not entirely clear in his answers,” said D66 Member of Parliament Wassila Hachchi.
“The State Secretary did not provide a clear answer to our question how tax was collected on the islands compared to the old situation under Antillean tax regime. We will address matter in the new Second Chamber after the elections,” Hachchi told The Daily Herald in a reaction.
Hachchi and her colleague Wouter Koolmees, also of D66, had posed a series of questions late May this year. Only last week they received a reply from the State Secretary, who took longer to answer than usual.
In his answers, Weekers explained the new tax regime which was implemented on January 1, 2011, as well as the workings of the general sales tax ABB, a levy that has driven up prices on the islands considerably. The ABB was decreased from six to four per cent on St. Eustatius and Saba, and from eight to six per cent on Bonaire per October 1. 2011. Weekers said the ABB is levied once at the entry of goods in the Dutch ‘public entities’ Bonaire, St. Eustatius and Saba, and that theoretically there should be no difference between the effect of the ABB on the various sectors.
The recent study by the bureau Ecurys has shown that some entrepreneurs are incorrectly using the new system. “These entrepreneurs applied ABB to every delivery of goods. This leads to unnecessary high prices. The more elements there are in the sale of a product, the bigger the chance that the ABB is wrongly applied. These entrepreneurs are being informed on the correct use of the ABB.”
The Ecurys report confirmed that the cost of transportation on St. Eustatius and Saba.[???]
The main contributors were higher fuel prices and the excise increase. However, the total tax burden has not changed, stated Weekers, who explained that the new tax regime implied a shift from direct to indirect taxes.
Weekers is still trying to reach an agreement with St. Maarten about the five per cent Turnover- Tax levied over all products on St. Maarten including those that are exported to St. Eustatius and Saba. This results in double levying of taxes. Internationally it is customary that taxes are levied in the country where the goods are consumed, not in the country from where the goods are exported. “From that perception, the cabinet is of the opinion that St. Maarten should not levy Turn-over-Tax on goods destined for St. Eustatius and Saba.” Representatives of the Dutch Ministry of Finance had talks with St. Maarten Minister of Finance Roland Tuitt on June 13, on the tax exemption for St. Eustatius and Saba. According to Weekers those talks were “constructive.”
D66 had asked the State Secretary to provide clarity on, among others, the tax burden on St. Eustatius and Saba, the effects of the ABB, also on the budget of the local government, the influence of excises on the local economy, and the collection of the health care premium. Hachchi and Koolmees also asked the State Secretary to give calculations.
This is a very good request. We tried for a very long time to get these information too but the business sector didn’t get an answer from the state secretary. Its cheap politics from Mr. Weekers to blame the private sector. It read, that the ABB was from some businesses not correctly implemented. Is that so? I haven’t seen the report, only an unfounded claim and a “study” made and paid for by the minister. The Saba business community wasn’t involved. Since they always ask us to come up with “numbers” to proof our case, I did just that two month ago for my business, but without any reply. Now to be fair, let the finance minister and state secretary come up with their numbers. They have refused to give it to the local island governments at the last BES week (that’s when they all walked out) and they didn’t give them to us and obviously not to the D66, means the second chamber. What could be the reason for that? The ABB service tax was “lowered” to 4%? Yes it did, after intense intervention from the Business associations. But it was also implemented since it didn’t exist before that. So lowering means obviously implementing it with 6% and then after nine month “lowering” it to 4%. So if they don’t believe us, you know what, we don’t believe them neither. The tax department in Bonaire cashed in social premiums for the directors until I found out that it isn’t the right amount (some 2% instead of 18%). It took them only a year to refund it. There are more open questions about refunds for fisherman and dive operators on the “fuel tax” and certainly there is a big problem with the not yet implemented “vastgoedbelasting”, which we all know will be implemented retroactive for 2011 and will bring more burden to the islands. The whole implementation was done wrong and we informed them about our view countless times in letter, articles and meetings but were only greeted with arrogance and disbelieve. Now they have to deal with it, since we deal with it since the first of January 2011. Another crucial question is: is it legal in the first place to inform the tax payers two weeks before a tax gets implemented and has to be paid? This is less time than you have to object to it. Furthermore in all townhall meetings held by the tax office, the population and business people were giving tons of wrong or flase information. I’m personally wouldn’t vote for the VVD, since I have no good experience. They say they are a “pro-business” party? Maybe longtime ago. The only one who is obviously really interested in the islands is Mrs. Hachchi and the D66. But this topic is only one point of concern: High transport costs, 5% ToT from SXM, high taxes on fuel and I can go on and on. Let me request this: Mr. Weekers, give us the numbers of taxes collected NOW before the elections so you can proof your point. My bet is that it is more than it was supposed to be and that even before you start collecting “vastgoedbelasting”.