THE HAGUE, WILLEMSTAD – If there is one reform that will test political courage, it is the introduction of Value Added Tax (VAT).
The Landspakket (Country’s Economic Reforms) report sets a firm deadline: a political decision must be taken by January 1, 2026. Without it, implementation before 2027 becomes impossible.
This is a critical turning point.
Why VAT Is Being Proposed
The current sales tax system has structural weaknesses:
Complex exemptions
Administrative inefficiencies
Limited compliance
Revenue volatility
VAT aims to create:
• Broader tax base
• More stable revenue
• Better enforcement
• Alignment with international standards
For government finances, VAT could increase predictability.
Why VAT Is Politically Dangerous
VAT touches every consumer.
In a small island economy where purchasing power is sensitive and inflation has already affected households, the perception of “new taxes” can be politically explosive.
Small businesses worry about compliance burden.
Opposition parties may frame VAT as anti-social.
Election cycles complicate timing.
Economic Reality
Without tax reform, Curaçao risks:
Revenue stagnation
Continued fiscal fragility
Higher dependency on indirect measures
The real debate is not whether reform is needed — it is how it is structured.
Design matters:
Will basic goods be exempt?
Will rates be differentiated?
How will small businesses be supported?
The decision window is closing. Avoiding the issue is no longer viable.