WILLEMSTAD - The Association of Business Curaçao (VBC) opposes the government's intention to impose a 6.75 percent interest rate on outstanding tax debts, for which no payment arrangement has been requested, starting from July 1, 2023.
The VBC represents the interests of the private sector and expresses its serious concerns about this intention. According to the VBC, this measure will have a negative impact on Curaçao's already struggling economy, which is still recovering from the effects of the Covid-19 pandemic and is expected to reach the pre-Covid level of 2019 only in 2025.
The VBC emphasizes that, apart from the tourism sector, many sectors such as the refinery, shipyard industry, and international financial sector are facing significant challenges.
Liquidity
There is also a decline in population and an aging population. In this context, the VBC questions whether withdrawing liquidity from the economy to spend it on consumptive purposes is the right way to stimulate investments.
The organization suggests that a policy focused on increasing liquidity might have been a better option, as it would provide consumers and businesses with more resources to spend and invest, ultimately benefiting economic growth and generating more revenue for the government.
Tax Burden
Furthermore, the VBC criticizes the high tax burden in Curaçao, which it claims is the highest in the Kingdom of the Netherlands compared to surrounding Caribbean islands and larger countries such as the United States, Canada, France, and others. The organization emphasizes that the addition of a 6.75 percent interest rate will only worsen the situation.
The VBC also expresses concerns about the functioning of the tax authority, stating that thousands of objections are still pending. The organization fears that the interest will be unjustly imposed in some cases, leading to unnecessary administrative burden for taxpayers.
Revoke or suspend
In response to these concerns, the VBC urges the Minister of Finance to take these issues into account and show more understanding. It emphasizes the importance of a government that plays a stimulating and facilitating role in promoting economic growth and recovery. The organization calls on the government to revoke or suspend the decision to impose a 6.75 percent interest rate.
Finally, the VBC proposes bringing the issue to the Tripartite Platform and calls for dialogue between the government and the private sector to jointly seek appropriate solutions. The VBC is convinced that a constructive dialogue and collaboration between the government and the business community will pave the way for healthy, sustainable economic growth, and a resilient society.