The Kingdom of the Netherlands-Aruba: Technical Assistance Report-Towards a Sustainable Tax System
IMF Staff Country Reports, December 18, 2018
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- The Kingdom of the Netherlands-Aruba: Technical Assistance Report-Towards a Sustainable Tax System
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Bibliographic details
- Published: December 18, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484380130.002
Background and context
- Over the last decade, Aruba has faced three recessions resulting in a public debt of approximately 90 percent of GDP.
- The authorities introduced a crisis package earlier this year, mainly by increasing the turnover taxes.
- The Government views replacing the crisis levy as an opportunity to streamline, modernize, and make the tax system more sustainable for Aruba's future needs.
Fiscal position and required adjustment
- Aruba should close a fiscal gap of 1.5-2 percent of GDP over the next two to three years to return to a sustainable path.
- Its current budget deficit needs to be reduced to place public finances on a sustainable trajectory.
Assessment of the current tax system
- The current system is not well equipped to:
- Modernize and simplify revenue administration.
- Shift the tax burden away from income and profits toward consumption.
Recommendations and reform objectives
- Replace the temporary turnover tax increases (crisis levy) with a tax reform that will:
- Modernize and simplify the current system.
- Raise more revenue.
- Shift the tax burden away from income and profits toward consumption.
Subjects and keywords (as listed)
- Subjects: Consumption taxes, Excises, National accounts, Personal income, Sales tax, Taxes, Value-added tax
- Keywords: Caribbean, Consumption taxes, CR, Excises, Global, indirect tax, ISCR, license fee, Personal income, progressive tax, proportional tax, Sales tax, tax burden, tax rate, tax system, transfer tax, turnover tax, Value-added tax, withholding tax, zero rating
Content in this bundle
- Country Report