Residents of Bonaire, St. Eustatius and Saba can look forward to a large increase of the so-called untaxed sum (“belastingvrije som”), the amount over which people don’t have to pay wage or income taxes, per January 1, 2023.
Dutch State Secretary of Finance in charge of taxes Mamix van Rij announced this in a letter to St. Eustatius Government Commissioner Alida Francis last week. Francis sent a letter to Van Rij in January this year in which she sought attention for the increased tax burden of Caribbean Netherlands residents and the overall high cost of living for the Statia people in particular.
Van Rij, who was Francis’ predecessor as Government Commissioner for St. Eustatius, started his letter with an apology to Francis for his delayed reply. He explained that the untaxed sum was automatically adapted to the inflation on a yearly basis. Because of the increasing prices, the untaxed sum was adjusted upwards up to 2021.
However, per January 1, 2022, the untaxed sum was adjusted downward by 3% due to a decrease in the price level as a result of the subsidies to lower the electricity, water and inter-net tariffs in the Caribbean Netherlands.
But because the inflation has strongly increased in 2022, the yearly inflation correction will most probably result in a large increase in the untaxed sum, Van Rij stated. He said the size of the increase was not known as yet since the extent of the inflation correction would only be calculated in October.
The higher untaxed sum will be in addition to the structural increase of the tax-free sum of US $500 per taxpayer per January 1, 2023, a measure that was announced on Budget Day last Tuesday as part of a compensation package for the Caribbean Netherlands to mitigate the increase in the cost of living.
In her letter to Van Rij in January, Francis also raised the issue of the purchasing power of people in St. Eustatius and the high cost of living. Van Rij replied to this that for the Dutch government it was clear that St. Eustatius is an equal part of the Netherlands. “The benchmark social minimum is the compass with regard to social subsistence.”
The state secretary listed a number of measures that were taken to improve the standard of living for Caribbean Netherlands’ residents. He mentioned that the minimum wages and social allowances were increased per January 1, 2022.
In addition, the excise on gasoline was lowered per April 1, 2022, and low-income households will soon receive a one-time energy compensation. The current gasoline excise reduction will be prolonged for the first half of 2023, after which the reduction will be phased out and eliminated per January 1, 2024.
The Daily Herald.