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Statia, Saba propose restoring Turnover Tax

TUESDAY, 12 MARCH 2013

THE HAGUE–St. Eustatius and Saba want to get rid of the general sales tax ABB (algemene bestedingsbelasting) and to reinstate the Turnover Tax (ToT) on their islands.

According to Saba Commissioner Chris Johnson, the ABB is cumbersome and leads to excessive prices on the islands. “The ABB makes no sense. Import duties are only useful if you have own produce to protect, but we barely have own produce,” he told Members of the Second Chamber in a meeting on Tuesday.

Johnson explained to the Dutch Parliamentarians that people often import goods themselves, products that they bought in St. Maarten. These goods have to go through Customs when they enter Saba, where six per cent ABB is levied.

“We want to go back to the ToT,” said the Commissioner. St. Eustatius and Saba brought forward their wish when they met with officials of the Dutch Ministry of Finance on Tuesday. No percentage was mentioned, just the general conception. The Ministry’s representatives apparently were not very receptive to the idea.

Reintroducing the ToT would mean a significant decrease of the tax burden on the people and less paperwork. The ToT is simpler and cheaper to check and implement, said Johnson. Member of the Second Chamber of the Dutch Parliament Ronald van Raak of the Socialist Party (SP) heard Johnson’s plea and suggested the islands to put their proposal on paper.

St. Eustatius and Saba had a ToT (belasting op bedrijfsomzetten BBO) of three per cent from 1997 to the end of 2010. On January 1, 2011, the ToT was replaced by the ABB under the new fiscal system, which became effective on that date.

Although the ABB is levied once on goods that enter the islands, the tax does lead to accumulation in services, including in hotels, restaurants and bars, even though the ABB rate on services is four per cent.

Bonaire doesn’t want to reintroduce the Turnover Tax, but it does support the wish of St. Eustatius and Saba, said Commissioner Burney Elhage on Tuesday. Bonaire wants to eliminate the ABB for certain construction works. This would give an impulse to the local construction sector.

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