Curaçao plans an excise tax decrease of 25 per cent and to remove one cumulative OB sales tax link, reducing the price of gasoline by 24 Netherlands Antillean guilder cents per litre. The OB at both the retail and wholesale levels will be dropped for diesel fuel, on which there is no excise levy.
These two things are estimated to cost the Dutch Caribbean country some NAf. 27 million this year. The difference will be made up with higher-than-forecast earnings from the same OB.
The Netherlands already lowered its gasoline excise tax by US $0.16 per litre for Bonaire, St. Eustatius and Saba. This money is coming from funding provided to these three so-called BES islands as compensation for rising energy prices.
Not much has been heard lately from competent authorities in St. Maarten on the issue. Mention was made earlier of expanding the “basket of basic goods” for which maximum prices are set and talks were held with importers and distributors regarding especially the cost of food, but so far not resulting in any visible relief.
There are obviously budgetary issues to address when cutting any tax and thereby income for the national treasury. However, the spike in fuel rates impacts not just transport expenses, but water and electricity tariffs as well as the cost of living and doing business in general.
There is one peculiar aspect of the local situation not to be overlooked. Fuel is currently significantly cheaper on the French side and if this gap grows it will drive more motorists over the open borders to fill their tanks there.
Experience has shown that such a scenario can lead to considerably less government revenue. If prices at the pump are allowed to keep increasing it could thus prove counterproductive, so reducing government charges might even make sense to limit losses.
