WILLEMSTAD - An increase in indirect taxes is currently one of the most obvious options for austerity measures on the table. No general increase, but selective on certain products and services.
The government of Rhuggenaath of Curaçao, more specifically minister Kenneth Gijsbertha of Finance, is in a split: to eliminate the gap of 127 million guilders this year, either the income must be raised, or extra cutbacks must be made or a combination from both. Neither, however, does the cabinet see as feasible.
According to Gijsbertha, it is not possible to cut much further in what the government offers to public service, otherwise, it goes at the expense of quality and level. Rising taxes, on the other hand, is seen as an 'ultimum remedium', a last resort.
The government does not want to increase the tax burden for both private individuals and legal entities - citizens and the business community. That is why the Minister of Finance already indicates at this stage not to think of raising wage and income tax nor a higher percentage of profit tax. These are both so-called direct taxes, which employees see directly on their pay slip and feel in their wallets. Profits tax is only paid if profit is made.
Indirect taxes are taxes levied indirectly by governments, such as the turnover tax. These taxes are indirect in the sense that they are collected by an intermediary, the seller, who charges the tax to the final payer in the price. Other forms of indirect taxes are, for example, excise duties and import duties.
Indirect taxes are also called 'cost-increasing taxes'. Gijsbertha, therefore, admits that the cost of living will increase slightly, but that everything will be done to spare people with the lowest incomes as much as possible.