Friday , December 9 2022

Agreement on tax relief

Caretaker Dutch State Secretary of Finance Frans Weekers and delegations from Bonaire, St. Eustatius and Saba closed an agreement on Wednesday to improve the fiscal system in the Caribbean Netherlands and to also remove some bottlenecks. The agreement includes several measures to improve the economic development of the islands and to increase the purchasing power of citizens, especially where the prices of basic commodities are concerned. Agreement was reached to increase the number of products to be exempted of General Expenditure Tax, while excise duties on gasoline will be reduced by 10 cents. The Island Governments are to introduce price controls, if necessary in cooperation with the Kingdom
Government, to ensure that the tax reduction will indeed lead to lower prices for consumers. Property tax will also be adjusted, it was agreed. The first US $50,000 of the value of second homes of individuals will be exempted of real estate tax.
The new tax system for the Caribbean Netherlands was introduced in 2011. The Dutch Government and Bonaire, St. Eustatius and Saba agreed at the time that the proceeds of the new system should be equal to the proceeds of the old tax system, while taking the inflation rate into account. Because the new tax system over the fiscal year 2011 will yield approximately
$5 million more than expected, there has become money available for improvements. The additional funds have become available from real estate tax, which yielded more than double the amount than estimated. Due to the expected higher yield, the property tax rate will be reduced from one per cent to 0.8 per cent, as was stipulated in the draft law. To stimulate the development of the hotel sector in Bonaire, Saba and Statia the property tax rate for hotels will be halved from 0.8 per cent to 0.4 per cent. Finally, an investment clause will be introduced. Investments to improve and increase the value of real estate, such as new construction, renovation and expansion, will be exempted from real estate tax for a period of five years. The decisions in which the value of real estate has been officially established will be sent out this month. The tax assessments for 2011 and 2012 will be imposed as soon as possible, it was agreed. Because the two tax assessments of 2011 and 2012 will be imposed jointly, the tax rate over both years will be reduced by an additional 0.2 per cent. Once approved by the Dutch Parliament, the real estate measures are to take effect retroactively as per January 1, 2011. All other measures will take effect on January 1, 2013.
“This package will provide relief in the cost of living for citizens of the islands,” State Secretary Weekers said. He said he would also remain committed to solving the double indirect taxation on goods imported in Saba and St. Eustatius 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,” Weekers said, according to Government Service Caribbean Netherlands RCN.“I will present this package of measures to the Dutch Parliament’s Second Chamber by amending the Law Other Fiscal Measures 2013,” according to the State Secretary.

The islands’ delegations, which included Commissioners Glenville Schmidt and Koos Sneek of St. Eustatius and Saba’s Commissioners Chris Johnson and Bruce Zagers, stated they were pleased with the measures, and in particular with the State Secretary’s involvement therein. “The State Secretary is constantly focused on the economic development of the islands and he takes steps to improve it,” delegation members were quoted as saying.
Source: “The Daily Herald”, 2012-10-12

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