Elected officials, at both the island and national level, under pressure from disgruntled citizens influenced government officials to lower taxes in the BES Islands and improve public relations.
(OTR Note: The BES islands are Bonaire, St. Eustatius and Saba, formerly part of the erstwhile 5-island Netherlands Antilles, and partially integrated 'public entities of the Kingdom of the Netherlands' after 10th October 2010).
The general sales tax (ABB) on all services in Bonaire, St. Eustatius and Saba will be reduced by 2% on January 1,2012. The import tax on cars in St.Eustatius and Saba will be reduced. Instead of having to pay 25% import duty, people buying cars on these islands now will have to pay 18% on the first $20,000 of value increasing to 30% for vehicles worth more than $30,000.
Several other tax relief measures for the islands will go into effect on October 1 this year. Overall taxes will be reduced by $6 million. Other cuts are being discussed.
On October 1, the tax-free sum and the allowance for children and the elderly all will be increased by five per cent. The 5% increase for children and the elderly will be added to the 5.9% inflation indexing.
Furthermore, the elderly deduction in income and wage tax assessment will be increased from $200 to $1,200. Pension premiums paid by the elderly will be marked as negative income in their tax assessment.
According to preliminary indications, the ABB tax and excises on the three islands for this year have yielded an additional $10 million. The new fiscal regime that went into effect on January 1 this year should yield a total tax revenue of $52 million for the three islands per year, but it turned out to be more.