WILLEMSTAD - The Social Economic Council (SER) has issued strong criticism of Finance Minister Javier Silvania, stating that he granted tax exemptions without valid legal authorization.
In a recent advisory report, the SER noted that current tax legislation, including the collection ordinance submitted by Silvania to Parliament, does not contain any provision that grants the Finance Minister the authority to provide tax exemptions. This implies that Silvania overstepped his powers by issuing these exemptions.
The SER highlighted that Silvania did not follow the usual practice in Curaçao, where a temporary tax relief measure is typically announced pending the implementation of a legal framework. In contrast, Silvania implemented tax reliefs without a legal basis, according to the SER.
The government’s legal department, WJZ, also pointed out that tax measures can only be retroactively legalized if they have been announced in advance. Without such an announcement, WJZ stated that it is not possible to later incorporate these measures into law, as Silvania proposes.
The SER further argued that regulating tax measures through a separate temporary ordinance does not align with an integrated approach to the tax collection process. Therefore, the SER believes that such measures should be included in standard tax legislation to ensure the integrity and effectiveness of tax collection.
Silvania provided tax debt reductions to those who paid part of their debt and forgave all tax debts prior to 2017. He then submitted a bill to Parliament to legalize his decisions. The SER noted that typically, tax assessments that are at least five years old may be forgiven.
The SER also identified several shortcomings in the public announcements of the tax measures and the accompanying strategies. The council emphasized the need to create broader support within the community for the tax authorities, with transparent information about the effects of the tax measures.
The scope of the tax measure, as described in the bill, is considered by the SER to be much larger than usual. Silvania's measure, however, pertains to all tax assessments from 2017 and earlier.
According to the SER, these broad measures do not align with international practices. Additionally, the SER pointed out that the decision to withdraw the tax inspector's authority to impose assessments for the years 2017 and earlier, effective from January 28, 2023, has far-reaching consequences. This includes recently imposed assessments and payment arrangements based on them.
The SER calls for a reconsideration of these measures and advocates for a more transparent and legally grounded process for granting tax exemptions.