WILLEMSTAD - Continuation of the tax restructuring scheme until the end of the year, as previously initiated by Finance Minister Javier Silvania, is expected to generate approximately 11.6 million guilders in additional tax revenue for the Curaçao treasury; with the possibility that this amount will rise to 16.2 million.
The Ministry of Finance extended the remediation option deadline to Dec. 31 from Oct. 12 for taxpayers to pay their outstanding tax debts in a lump sum. The restructuring regime also includes social and employee insurance contributions.
The addition of social security contributions to the scope of the restructuring scheme is expected to have a positive effect on both short- and long-term revenues, as is the case with taxes. Here too, it applies that 'many overdue assessments still have to be imposed'.
“Due to the current pressure on social funds, compliance-increasing measures are also necessary for social premiums to increase premium income. With the broadening of the scope and extension of the period of validity, this is provided for”, the Silvania Guidelines report.
Based on the realization figures up to and including August, this seems to be 'a feasible target' for the time being, the minister continues. For the current budget year, this means a realization of premium income that is 44.4 million guilders higher than originally budgeted.
“It is well known that tough measures are often necessary to induce taxpayers to pay their tax debts.” However, the limited collection capacity is the main risk for the realization of this scenario, according to the explanation of the Silvania Guidelines.
The 'neutral scenario' (with an estimated chance of realization of 30 percent) requires relatively little additional effort from the collectors. The service of enforcement notices by the bailiffs will continue, which will lead to a limited influx of new applications for remediation.
The 'negative scenario' (with an estimated probability of realization of 20 percent) is the least likely according to the Guidelines. Remediation applications will still be received after October 12, 2021. Nevertheless, this scenario has been included as a minimum starting point.”
All in all, this involves around 11.6 million in additional tax revenue, possibly rising to 16.2 million. According to the financial section of the notes.