Wages tax to be
charged on tips
~ Minister issues decree ~
WILLEMSTAD--Minister of Finance Ersilia de Lannooy has issued a ministerial decree instructing the Inspectorate of Taxes to start charging wages tax on tips.
The decree issued at the beginning of August will have an effect on workers in casinos, restaurants, bars and hotels.
The issuance of the decree was announced during yesterday’s meeting of the Central Committee of Parliament.
De Lannooy explained during the meeting that the possibility to levy tax on tips existed already in the law, but had never been executed. She said the Tax Inspectorate considered tips part of a worker’s salary and therefore he or she should pay wages tax on these monies received.
According to the Minister, the Tax Inspectorate had been asking for the instructions. Without going into details on how the wages tax would be levied on tips, De Lannooy said the calculations would be made based on the service charge on the customer’s bill.
MAN Member of Parliament Dwigno Puriel brought up the ministerial decree during the meeting. He said it was still vague how the Tax Inspectorate would be levying wages tax on tips, but the employer would have to retain the wages tax from the worker’s salary.
However, Puriel believes the instruction was unnecessary, because in practice it wouldn’t work if all restaurants and bars stopped adding service charges to their bills.
In many cases, tips constitute a significant component of the earnings of workers of casinos, restaurants, bars and hotels.
