WILLEMSTAD - Since the signing of the Country Package at the end of 2020, Curaçao, in collaboration with the Temporary Work Organization (TWO), has made progress in various reform areas. However, substantial steps are still required to achieve the intended goals, as indicated in the recent progress report in which Secretary of State Alexandra van Huffelen updates the Dutch House of Representatives on various reform trajectories.
The reforms are part of a bilateral Country Package aimed at making the local economy resilient, restoring public finances, and improving education, healthcare, and the rule of law. The Temporary Work Organization supports Aruba in implementing these reforms.
One of the key areas showing progress is the government's financial management. A roadmap has been developed to address major bottlenecks and obtain an unqualified audit opinion for the 2026 financial statements. The timeliness of the financial statements has significantly improved, with backlogs largely being cleared, according to the Secretary of State.
In terms of public organization, an ambitious program called 'Improving Government Functioning' has been established, focusing on savings and quality improvement. This includes the establishment of a Top Cadre Directorate and steps toward a digital government and services.
Autonomous Matter
However, the dialogue on tax system reform has been limited, according to the Secretary of State. While some legislative changes have been made, the modernization of the tax authority has proven crucial to improving revenue collection and increasing annual returns.
Curaçao considers the design of its tax system as an autonomous matter. Some bundles of legislative changes have been implemented, partly to rectify outdated legislation and partly to address gaps in the law that hindered a fairer distribution of the tax burden.
On the other hand, the reorganization and modernization of the Curaçao tax authority are progressing well. There is a recognition that a well-functioning, integrity-driven, and public-friendly tax authority is a prerequisite for the success of the tax system.
Both the organization's structure and practices, along with ICT tools, are being drastically modernized. This is already resulting in improved revenue collection and higher annual returns, even when accounting for the 'catch-up effect'.
In this process, the facilitated collaboration with the Tax Office Caribbean Netherlands by TWO is a crucial factor. The need for modernization of the tax authority is not only technical but also involves integrity and organizational culture.
As recent research shows, there is unauthorized preferential treatment or disadvantage of certain taxpayers in the implementation. Addressing this issue is an explicit goal of the Country Package and has been a focal point during the implementation of reforms.
Other Areas
Progress has also been made in the financial sector with the introduction of the UBO register and regulations related to money laundering and terrorism financing. Work is underway on consumer protection and a deposit guarantee system.
In the socio-economic and healthcare fields, steps have been taken, such as the healthcare agreement aimed at cost control and quality preservation.
Despite these developments, the report notes that the implementation pace is sometimes slower than hoped, mainly due to capacity shortages and slow decision-making. It is emphasized that Curaçao could better utilize available resources and intensify collaboration, both within the Kingdom and with Caribbean Netherlands, to reinforce the reforms.
This progress and challenges will be further discussed during planned visits by Van Huffelen to the Caribbean Countries, with a focus on collaboration and the way forward.