The in­crease in taxes in the Ca­ribbean Netherlands will be postponed for at least a year, it was decided in the Second Chamber of the Dutch parliament last week. An amendment to tempo­rarily halt the implementa­tion of various tax measures for the year 2025, submitted by Christian Union, Groen­Links and Democrats 66, was passed on Thursday with a majority. Only Party for Freedom and People’s Party for Freedom and De­mocracy voted against the amendment.

The amendment requests that the Dutch government come up with targeted sup­port for the lowest incomes. “The submitters call on the government to use this deadline to come up with a solution in substantial con­sultation with the islands that better targets the disad­vantaged income groups,” it was stated in the proposal. The Tax Law BES 2025 was meant to be the first major adjustment to the tax system since 2011, which included increasing the yield tax for entrepreneurs and the property tax for hotel own­ers. It would also mean that residents with an annual in­come of US $50,000 pay a higher tax rate, whereas this minimum was previously $323,000.

The tax plan also included a structural increase of the tax-free allowance. With current and future wage in­creases, the tax-free allow­ance would also increase, so that people do not imme­diately lose that additional income. However, Christian Union, Groenlinks-PvdA and D66 fear that the poor­est residents of Bonaire, St. Eustatius and Saba will not benefit from the increase in tax-free allowance.

“The real problem is not only or not so much the level of incomes or taxation per se, but still mainly its combination with the high cost of living and an insuffi­ciently strong social security system,” the three parties wrote in the amendment. The parties’ second objec­tion has to do with the cost of the plan, which is expect­ed to cost 15 million euros. This is twice as much as the allocated budget. That is partly why the Dutch gov­ernment wants to increase taxes for business owners, hotel owners and some resi­dents. The Executive Coun­cils of Bonaire, St. Eustatius and Saba also objected to those tax increases, mainly because the consequences remain unknown.

That is why the submitters of the amendment request more targeted policies in consultation with the is­lands. Moreover, the gov­ernment would still have some time to align the mini­mum wage and tax-free al­lowance.

The Daily Herald.