Curaçao’s tax and social premium burden (47.3%) is double that of St. Maarten (23.3%) according to their joint Central Bank (see Thursday paper). However, one would not be able to tell that from the local cost of living and doing business.
The question “Why?” remains an intriguing one that cannot be answered by the consumer. A lot of households, including what are considered middle-income earners, struggle to make ends meet.
High rents and selling prices for residential as well as commercial real estate play an important part. This goes back to the quick local tourism boom experienced in the final part of last century, when any kind of living or working space was scarce.
Regarding social premiums revenue, that will of course go up significantly for St. Maarten starting August 1, when the mandatory Social Health Insurance SZV coverage wage limit goes up to 120,000 Netherlands Antillean guilders per year. This was preceded by raising the old age AOV pension age to 65.
The impression should therefore be avoided that the burden is not on the rise here. Besides, it was still higher when compared to that of Antigua and Barbuda (19.2%), which is in the same region and a direct competitor for tourism, particularly yachting.
Nevertheless, figures don’t lie, and these raise some concern. Coupled with a notoriously low fiscal compliance, it confirms the picture of too many dodging their collective responsibility.
The latter should be where the focus remains, rather than on raising existing taxes or introducing new ones and increasing the burden for those who already fully meet their civic obligations. That can also help ensure a level playing field where everyone pays their fair share.
Above all, it’s the right thing to do.
