WILLEMSTAD – Recent developments surrounding Curaçao’s tax collection problems confirm the urgency of the tax reform proposed by PAR, according to analysis shared by Luigi Faneyte. He points to newly disclosed figures and expert reports that underline how deeply structural the problems within the current tax system have become.
For years, Curaçao has struggled with major deficiencies in tax collection. Recent data show that more than ANG 3 billion in taxes and social premiums remain outstanding. Minister of Finance Charles Cooper recently told the Curaçao Parliament that approximately ANG 2.3 billion in direct taxes alone have not been paid, a figure that aligns with earlier estimates of a total tax debt exceeding ANG 3 billion. According to Faneyte, these numbers confirm that the problem is not incidental but systemic.
Reports from oversight bodies and media investigations indicate that the backlog in tax collection has built up over several years. A significant portion is attributed to non-compliance by individuals and companies, combined with weak enforcement by the tax authorities. Studies by SOAB and warnings from the College financieel toezicht point to years in which tax returns were insufficiently checked and many defaulters received little or no follow-up. In several cases, payment arrangements were poorly monitored, leading to millions of guilders in lost revenue. Only after old assessments were written off did the full scale of the problem become visible.
Against this background, Faneyte argues that PAR’s long-standing proposal for tax reform is increasingly validated by current realities. In its 2025 election platform, PAR called for the abolition of wage tax and turnover tax and their replacement with a broad-based value-added tax system. According to PAR’s own calculations, introducing a VAT system at unchanged rates could generate more than 18 percent additional revenue compared to the current structure. While revenues under the existing wage tax and turnover tax system amounted to approximately ANG 1.078 billion in 2024, projections under a VAT model point to revenues of about ANG 1.276 billion in 2025.
Faneyte highlights that the proposal is not only about higher revenues, but also about efficiency and transparency. A VAT system applies taxation at every stage of production and sale, creating clearer invoicing and reducing opportunities for fraud. This, he argues, would give the tax authorities greater control over transactions and reduce administrative complexity, particularly in a system that currently struggles with enforcement capacity.
Concerns about the impact on low-income households are also addressed in PAR’s proposal. According to Faneyte, basic goods would remain zero-rated, while targeted compensation measures such as income support, exemptions or vouchers would be introduced to prevent an excessive burden on vulnerable groups.
Support for reform is not limited to PAR. The Sociaal-Economische Raad Curaçao has advised the government to modernize the tax system and broaden the tax base, explicitly warning against excessive exemptions and tax avoidance. The Cft has also repeatedly stressed that without fundamental reform and a more automated, stricter approach, the growing arrears will remain unmanageable. International experience, Faneyte notes, shows that broad VAT systems with fewer exceptions are generally more stable and easier to enforce than fragmented direct tax regimes.
In conclusion, Faneyte states that the latest disclosures by the government, particularly the confirmation of billions in unpaid taxes, reinforce PAR’s position that the current tax system is no longer sustainable. He argues that moving toward a modern VAT system, combined with a strengthened tax authority and clear social safeguards, offers a realistic path toward a fairer, more workable and future-proof tax structure for Curaçao.