WILLEMSTAD - The collection registry of the tax collector includes a nominal amount of over three billion guilders in overdue taxes and premiums from the past five years. This substantial amount is partly due to the failure to timely and effectively address prolonged non-compliance with tax obligations.
As a result, tax debts in some cases have escalated to millions. A stricter collection approach, including (temporary) business closures, aims to put an end to this, says the Ministry of Finance.
The ministry has recently increased its efforts to improve fiscal compliance. The tax authority is focusing particularly on businesses that need to remit monthly sales and payroll taxes.
Employers
Since July 2021, the tax authority has been working with customs and SBAB on these compliance activities. From July 2021 to the present, the number of businesses remitting the due sales tax (OB) monthly has increased from approximately 4,100 to over 5,500, an increase of over 34 percent.
The number of employers remitting the due payroll tax monthly has increased from 2,700 to over 3,200 in the same period, an increase of nearly nineteen percent. This improved tax compliance has also led to increased tax revenues. More and more businesses are remitting the due taxes and premiums monthly.
Defaulters
Despite this positive trend, there are still businesses that systematically, sometimes for years, fail to remit the due taxes and premiums, resulting in substantial tax debts, says the ministry.
For these persistent defaulters, a stricter collection approach is being implemented. In addition to seizing bank accounts and movable and immovable property, business inventories are also being seized, effectively (temporarily) halting operations.
Businesses must then contact the tax collector to come to an agreement on settling the overdue taxes. If no agreement is reached, the closure can become permanent.
Honest Businesses
The ministry emphasizes that the goal is not to (temporarily) close businesses. However, it is also unfair to honest businesses that some of their peers do not pay taxes and get away with it.
This causes unfair competition, which can lead to the closure of compliant businesses. The compliance activities aim to create a level playing field. Sales and payroll taxes are amounts withheld from customers and employees and do not belong to the business owner. If a business cannot consistently meet its tax obligations, the viability of that business must be seriously questioned.
This approach is applied in all sectors but only in cases of prolonged non-compliance and high tax debts, where despite various warnings, such as court-ordered summons, the withheld taxes are still not remitted.