Dutch State Secretary Mr. Weekers during his visit to Statia met with the Chamber of Commerce and other representatives of the Statia business community. The topic of the discussions was the new tax system that was introduced earlier this year.
The implementation of the system has stirred a lot of resentment among the private sector and the general population on the island. Businesses have seen their operational cost increase. Also consumer prices have drastically increased while in many instances the net income of citizens has decreased. According to the Central Bureau of Statistics the inflation in Statia was 6.4% compared to last year, the highest of the three BES islands.
The negative effect of the new tax laws combined with other effects that became visible after 10-10-10, such as the poor performance of the general healthcare insurance, the steep increase in airfares to the island and the unclear future with regard to electricity supply to the island, have led to great unrest under the population. A general anticipation that the living environment would improve after the constitutional change has proofed unfounded. The mood even amongst fervent proponents of the new status has turned into a negative attitude towards the new status and the Dutch Government in general.
The main purpose of the state secretary’s visit was to listen to the complaints and proposals presented by the business community in order to improve the tax system and curb the negative effects it has for the islands.
The Chamber together with the STEBA proposed 13 measures to improve the system. Proposals ranged from compensation for TOT our local citizens and businesses have to pay on imported goods in St. Maarten, resolve the issue of accumulation in ABB in the construction and restaurant sector, the steep increase in excise on gasoline, the decrease in net income for most pensioners and the 25% ABB on imported cars.
Mr. Weekers explained that it is his sincere intention to improve the system and to consider the proposals made. He warned however that if a measure will result in a decrease of tax revenues this measure may have to be compensated in another sector. The point of departure is the agreement with the governments of the three BES islands that the total tax revenue has to be the same as collected under the former Netherlands Antilles.
He stated that he will look for ways and means to make the tax system simpler for the tax payer. Also the difference in effect of the tax system between Bonaire on one side and Statia and Saba on the other has his full attention. He admitted that through the abolishment of the import duties in Bonaire the introduction of ABB had much less impact on that island than it had on Statia and Saba. He promised to present concrete proposals within the next 3 or 4 weeks, which can be implemented on short notice in the areas of the St. Maarten TOT, the discrepancy in the incomes of the pensioners, the customary wage for directors/owners of NVs and the improvement of the procedures at the harbor.
The state secretary also seemed receptive to the proposal to raise the maximum amount which is free of ABB by import from the present US $ 173.00. As a comparison: EURO 430 is exempted by import into the Netherlands from countries outside Europe. He furthermore stated that he will carefully monitor the implementation of the property tax and the effects this will have on the community. Weekers said that the tax inspection will review individual cases of businesses that may incur problems in this respect. Later this year the tax inspection will estimate the value of all properties in order to establish the amount of tax that need to be paid.
Although not all proposals made by the business community will be feasible in the opinion of the state secretary, the promise that he will come with concrete proposals to improve the system has been accepted as a positive sign.