WILLEMSTAD - After their official visit, the International Monetary Fund indicated that consistent implementation of good quality measures by the government will be key for reaching medium-term sustainability.
The authorities should consider broadening the ABB’s (sales tax) base to domestically produced goods in conjunction with a comprehensive tax offset mechanism, in line with advice from the recent IMF technical assistance mission.
The early retirement program should be accompanied by a broader civil service reform that structurally reduces the number of positions to secure long-term savings. Moreover, Curaçao would benefit from implementation of PFM reforms, including strengthening of expenditure controls and better incorporation of fiscal risks.
IMF also indicate that the authorities should compile timely information on balance sheets of all public sector entities and keep track of arrears and guarantees. An envisaged investment guarantee fund (Invest-Curaçao) involves significant risks and would require a cautious approach, including proper risk management and strong supervision capable of assessing the risks. Strong public communication of measures is critical for their social acceptance.