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.