WILLEMSTAD - The National Budget 2020 of Curaçao is not satisfactory, not even after the latest answers from Finance Minister Kenneth Gijsbertha to questions from the Committee on Financial Supervision (Cft).
The regulator gives until 19 March but points out in a letter to Gijsbertha and President of Parliament William Millerson to inform the Council of Ministers of the Kingdom (RMR) if it turns out not to be in order in ten days.
“The financial situation of Curaçao remains worrying,” writes Raymond Gradus, chairman of the Cft in a letter last Thursday, March 5. After the 2017 and 2018 budgets did not meet the standards of the Financial Supervision Act (Rft) and showed deficits on the regular service, “it is now clear that this will also be the case for 2019”. This is about a current deficit of approximately 20 million.
“For the 2020 budget too, the government continues to face major challenges,” the Cft continues, considering that with Gijsbertha's response of 20 February the budget for this year does not meet the Rft standards nor the financial instruction Curaçao received from the Kingdom Council of Ministers mid-last year.
“The budget does not yet contain the compensation for the deficit for 2019, has no conclusive normal service if the corrections proposed by the Cft are taken into account and has not been sufficiently explained.”
Following the minister's answers of 20 February, the letter proceeds point by point and mentions, for example, that with regard to the general spending tax (abb) and turnover tax (ob) the budgeted income has been adjusted downwards by 25 million, “but does not indicate the requested substantiation for the remaining increased income compared to 2019”. “The budgeted income for these types of taxes, therefore, remains insufficiently explained. The Cft requests that you still provide the requested explanation.”
Gijsbertha also adjusts the budgeted income from property tax (ozb) downwards by 14.4 million to 42 million. “The realization level of 2019 is, however, 26.4 million. The Cft believes that a higher amount for 2020 is not yet realistic and asks you to substantiate why this amount is realistic or to adjust the budget accordingly.” And so there are more comments: The Minister indicates that the higher substantiation of the 50 million extra tax revenue is now explained by the higher economic growth as estimated by the Central Bank (CBCS). Gradus responds: “The Cft has previously agreed with you to regard the estimates of the CBCS as leading and points out that if these are adjusted downwards you should follow them.”
Regarding the economy, in his letter of 20 February, Gijsbertha appears to expect an additional income of 27.6 million for 2020 because he no longer wishes to use the CBCS estimates for economic growth as the only starting point, but also the estimates of the IMF (International Monetary Fund). “According to the Cft, the fact that the means between the expectations of the CBCS and the IMF leads to better results cannot justify deviating from a consistent line of conduct. The Cft advises you to remain consistent in the use of the CBCS estimates.”
