On Tuesday, February 1st, The Executive Council sent a letter to Dutch State Secretary of Fiscal Affairs and Tax Department Marnix van Rij in which it objected to the new tax measures per January 1, 2022 that are adversely affecting people’s income.
In the letter to Van Rij, a copy of which was also sent to State Secretary of Kingdom Relations and Digitization Alexandra van Huffelen, the Executive Council stated that it was “surprised” by the unilaterally implemented wage and income tax measures for the Caribbean Netherlands. These measures were not discussed with the Public Entity Saba before they went into effect.
According to the Executive Council, these measures will result in a deterioration of the purchasing power of people on the islands. The tax measures come at a time when the temporary measures that reduced the price of electricity and internet have ended and the inflation increases. As a result, the cost of living goes up drastically. “This accumulation of setbacks results in a considerable lowering of the disposable income and is in stark contrast to the increase of the legal minimum wage with 10 percent.”
The argument that the tax threshold level (‘belastingvrije voet’) and the other measures are based on figures of the Central Bureau for Statistics (CBS) is not only invalid in the opinion of the Executive Council, but it is also not in line with the approach of other ministries. As an example, the Ministry of Social Affairs and Labor SZW and the Ministry of Home Affairs and Kingdom Relations BZK were mentioned. The Ministry of SZW did not adjust the minimum wage downwards based on the figures of the CBS. The Ministry of BZK also did not lower the free allowance (‘vrije uitkering’) based on the CBS figures.
The Executive Council urgently requested State Secretary Van Rij to reconsider the new tax measures and to bring this in line with the aspirations of the Dutch Government to reduce the cost of living in the Caribbean Netherlands to an acceptable level.
“The ambitions in the Governing Accord of the new Dutch Government to reduce the very high cost of living and to eradicate poverty on the islands are positive. The new tax measures contravene these ambitions,” said Saba Finance Commissioner Bruce Zagers.