Government proposes three revenue generating amendments

POSTED: 12/22/11 3:44 PM

WILLEMSTAD – The government has proposed that implementation of a new dividend policy, increasing the retirement age from 60 to 65 and introducing a basic health insurance by April 2012 as means to raise revenue in the coming year. All three changes form part of a note of amendment that has been submitted to parliament as part of deliberations on the 2012 budget.

The note of amendment states that rather than seek an annual dividend based on their profits the government wants the government owned companies to pay a fixed annual concession fee that the companies will not be allowed to pass on to the consumer. The reason for the shift is that there’s been difficulty in collecting a share of the profits from the companies.

Though the government is shifting away from dividends they also will attempt to collect profits from 2009 and 2010. This will be done in consultation with the companies. The talks will include setting a payment schedule.

The proposal for raising the pension age is an attempt to ensure the fund remains sustainable and the government states it will implement the hike in a phased way. People who turn 58, 59 or 60 next year will still be able to go on pension at the current retirement age of 60. The government also intends to abolish the possibility for early retirement, switch from unconditional indexation to conditional indexation and increase the AOV pension by one percent.

In the note on the basic health insurance the government proposes that it will provide coverage for all residents of Curacao who earn 90, 000 guilders or less per year and are insured by either Bureau Health Insurances (BZV) or the Social Insurance Bank (SVB). The basic insurance will also cover pensioners, people who make over 90, 000 guilders that can’t find affordable private insurance and migrants who make a maximum annual salary of 90,000 guilders.

The introduction of health insurance is associated with a 1.6 percent increase in premiums (10.4 percent to 12 percent). The employer will be required to contribute nine percent of the contribution, while the employee will have to pay three percent. Self employed people will have to pay the full 12 percent.

 

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