State Secretary Weekers of Finance and the governors of Bonaire, St. Eustatius and Saba have agreed today on a package of measures during a meeting on the fiscal system of the Dutch Caribbean. These changes will dissipate a number of bottlenecks in the economic development of the islands, and they will improve the purchasing power of citizens, especially for the necessities of life. The reason for the meeting was an agreement in 2011 with the introduction of the new tax system on the islands. It was agreed then that the proceeds of the new system should be equal to the proceeds of the old tax system, taking into account the inflation. Because the new tax system of the Dutch Caribbean in 2011 will yield approximately $ 5,000,000 more than expected, there is budget available to improve the system. These additional proceeds are mainly attributable to the vastgoedbelasting (immovable property tax), that will yield more than the double of what was originally estimated.
Joint Agreement was reached on a package of measures. Thus, the zero rate of basic necessities in the Algemene Bestedingsbelasting (General Expenditure Tax) is extended to increase the purchasing power, the accijns (excise duties) on petrol will be reduced by 10 cents, because of the lack of public transport on the islands and the first 50,000 USD of the value of second homes (those are homes provided for in Article 4.3 of the Belastingwet BES) of individuals exempted in the property tax. The island governments will introduce price controls again, if necessary in cooperation with the Kingdom government, so that the reduction in the burden of the Algemene Bestedingsbelasting will be possible and can be found in the prices for the consumers.
“This package will provide relief for the daily cost of living of citizens on the islands,” according to a satisfied State Secretary Weekers.
In addition, a boost will be given to the economy of the islands. Due to the expected higher yield of the vastgoedbelasting, the rate of the vastgoedbelasting will be reduced from 1.0 percent to 0.8 percent, the percentage specified in the original bill. The hotel sector is an important part of the island economy. To stimulate the development of this sector, the rate of vastgoedbelasting for the hotel sector will be halved from 0.8 percent to 0.4 percent. Finally, an investment facility will be included in the vastgoedbelasting. This means that the increase of the value of immovable properties through investment (new construction, renovation, expansion) will be exempt from vastgoedbelasting for 5 years.
The value ordinance for the vastgoedbelasting will be sent this month. The assessments for the tax years 2011 and 2012 will be imposed as soon as possible thereafter. Because these tax years will be imposed jointly by the end of 2012, the rate in 2011 and 2012 will be reduced by an additional 0.2%.
The measures for the vastgoedbelasting will take effect on January 1st , 2011, if the bill is adopted for this purpose by the States-General, and the other measures will take effect on January 1st, 2013.
In addition to the package of measures, the State Secretary of Finance will remain committed to solve the double indirect tax on goods imported from St Maarten.
“It was a constructive conversation. In good consultation, we agreed on a package of measures that will dissipate a number of bottlenecks in the economic development of the islands and that will benefit the purchasing power of citizens, in particular by reducing the cost of basic necessities. “I will present this package of measures to the Tweede Kamer through a letter of amendment on the bill Overige Fiscale Maatregelen 2013”, according to the State Secretary Weekers.
“The entire delegation of the islands is pleased with the total package, and in particular with the involvement of the State Secretary. The State Secretary is constantly focused on the economic development of the islands and he takes steps to improve it, “according to the delegation members.
Press release RCN, October 10, 2012
Eventually some of our concerns have trickled down and thanks to the intense work of the Saba, Statia and Bonaire business sector and the SBA in particular on Saba, tax rates will be lowered for the majority of the businesses in the BES islands. Thanks to all who have supported us and worked hard for these improvements. I really do hope and believe this will bring some relief to the tax payers and citizens on our islands. There is more to be done, i.e. the double tax on ABB, the double taxation from SXM and the employer contribution of 18.4%, but lets celebrate our achievments today. Have a great day folks 😉