WILLEMSTAD – The Curaçao government is deliberately shifting its tax system away from direct taxation and toward indirect taxes, arguing that this approach allows tourists and people operating in the informal economy to contribute more to public finances.
The policy is explicitly outlined in the 2027 Budget Memorandum, which shows indirect tax revenues growing faster than direct taxes over the coming years.
According to the government, the shift toward indirect taxation is consistent with its policy of broadening the tax base so that “everyone,” including the informal sector and tourists, contributes.
Direct tax revenue is projected at XCG 827.2 million in 2027, while indirect taxes are expected to generate XCG 1.210 billion.
By 2030, direct taxes are projected at XCG 859.2 million, compared with XCG 1.395 billion from indirect taxes.
Turnover tax will remain the largest indirect revenue source, generating a projected XCG 755.4 million in 2027 and rising to XCG 847.9 million by 2030.
Import duties are projected to increase from XCG 250.2 million in 2027 to XCG 282.8 million in 2030, while excise revenues are expected to rise from XCG 122.7 million to XCG 138.7 million.
The new Tourist Entry Tax also forms an important part of the shift, although its legislation is still going through the required process.
The budget simultaneously projects wage and income tax revenue of XCG 426.2 million in 2027, slightly below the XCG 430.1 million originally budgeted for 2026. Profit tax, however, is expected to rise substantially to XCG 197.8 million.
The strategy means that an increasing share of government revenue will depend on spending and transactions rather than exclusively on income and profits.