KRALENDIJK – Bonaire, St. Eustatius, and Saba have proven successful, perhaps against initial expectations, in their opposition to the proposed tax plans in the Tax Law BES 2025.

An amendment, introduced by the Christian Union, GroenLinks, and D66 to -at least temporarily- halt the implementation of various tax measures for the year 2025, was passed on Thursday with a majority of 89 votes. This, despite a strong recommendation from Finance Minister Eelco Heinen to reject the amendment.

The original Tax Plan included a structural increase in the tax-free allowance for all incomes. However, the intention was to target support only to those truly in need. To offset this unintended benefit for higher incomes, a series of tax-increasing measures were proposed to withdraw the extra benefits from wealthier individuals. However, these tax increases also appear to affect households earning below what the Nibud calculated in the ‘A Dignified Life’ report by the Thodé Commission, which addresses poverty issues.

Further concerns were raised by the islands about the gradual increase in tax burdens on the hotel sector. It was also pointed out that the proposed increase in the tax on profit distributions would impact small business owners with a B.V. (private limited company) or N.V. (public limited company) who actively work in their own businesses, such as cleaners and gardeners with only one or a few employees.

Turning point

Jaap Kos, a member of the Electoral College and a tax expert who has been deeply involved with the issue over the past months, expressed his satisfaction with the actions of the political parties in The Hague and the success achieved.

“This marks a break from past practices, even if the amendment does not ultimately pass. The era when tax legislation for the Caribbean Netherlands was handled as a mere formality in The Hague is now over. With this, members of parliament show that the voice of the people from the Caribbean Netherlands counts fully,” said Kos.

The postponement of the tax increases does not mean they will not still be implemented at a later stage; however parties have now achieved that a thorough study will have to be done. This in order to have a better understanding of possible consequences of the proposed hikes.