[{"bbox": [81, 120, 1164, 240], "category": "Text", "text": "The income inequality is the most stable among the islands of the Caribbean Netherlands. The Gini coefficient had a value of 0.40 in 2018, similar to the index in 2011²⁶, but poverty is persistent in the island. The unemployment rate (3% in 2019, down from 6% in 2016) increased modestly (4.3% in 2020) but remains low and unaltered in absolute numbers (370-400 persons actively looking for work)."}, {"bbox": [81, 256, 1164, 312], "category": "Text", "text": "**In conclusion, the authorities are pursuing a stability-oriented macroeconomic policy and the eligibility criterion is met.**"}, {"bbox": [85, 343, 437, 371], "category": "Section-header", "text": "### 2.3.3 Public Financial Management"}, {"bbox": [81, 387, 1164, 507], "category": "Text", "text": "Public financial management (PFM) of Bonaire is organised according to the rules of the Financial Law for the Public Entities, the General Law on the Public Entities and the Special Administrative Regulation. The Board of Financial Supervision, the *College Financieel Toezicht* (Cft), monitors and recommends on the financial management to the Dutch Ministry of Internal Affairs and Kingdom Relations."}, {"bbox": [81, 522, 1164, 642], "category": "Text", "text": "The identification of strengths and weaknesses of the PFM system are based on comments made by the external accountant auditor related to the Statement of Financial Operations; recommendations by the Cft; and the Governance Agreement 2019-2023 between central Dutch government and the Public Entity Bonaire. Strengths of the system are its strict fiscal discipline and the permanent monitoring."}, {"bbox": [81, 657, 1164, 746], "category": "Text", "text": "The 2019 Improvement Plan and Action list (June 2021) focuses the reform actions on organisational administration and internal control; the assessment of liabilities and risks; the registration of assets and the further development of local tax assessment and collection, as well as digitalisation and simplification of the procurement system."}, {"bbox": [81, 761, 1164, 972], "category": "Text", "text": "The Dutch Ministry of Finance determines the national tax policy, adapted to the Caribbean Netherlands, while the Island Council is responsible for local taxes. The modernization and digitalization of the Tourist Tax, replacing three previously existing local taxes strengthened domestic resource mobilization. The Island Taxes yield on average USD 15 000 000 - 18 000 000 (approx. EUR 13 300 000 – 15 900 000) per year. Over the past years, the local tax revenue administration was reformed, resulting in an increased revenue of USD 29 000 000 (approx. EUR 26 400 000) in 2023. The Central Bank of the Netherlands and the Authority Financial Markets control adherence to international tax principles (including control over illegal international transfers and money laundering)."}, {"bbox": [81, 987, 1164, 1197], "category": "Text", "text": "A gap in the reforms is the lack of a consolidated (investments and operational) budget at the start of the Financial Year. The budget preparation is limited to a medium-term forward projection. The budget is presented using the administrative budget classification. The classification would rate at “C” according to the PEFA Pillar 1, PI 4. The end-of-year Financial Statements are usually elaborated in time for submission to the external auditor. The 2010 Constitution envisaged that the public entities of the Caribbean Netherlands would establish a joint Court of Auditors. Since no agreement was reached, the Island Council created a local court for special audits; the members were appointed recently (February 2023)."}, {"bbox": [81, 1212, 1164, 1453], "category": "Text", "text": "The Public Entity Bonaire has demonstrated strong political willingness to continuously reform its public finance management. This commitment is illustrated by the PFM Reform being among the six priorities listed in the Budget Proposal 2023.²⁷ It is envisaged that further progress will be made in the reform of the island tax system (car and road taxes), the procurement system will be revised and digitalised and further improvements in ICT will be implemented (protocols, back-up, emergency control and cyber-security). Budget reports published quarterly provide information on progress. These are reviewed by the Cft, which issues recommendations and monitors their implementation. The track record of the reforms is positive. Over the years 2021 and 2022, Cft mainly monitored the progress over the 12-point Letter issued by the ministry of the Interior and Kingdom Relations. By late 2022, 11 of the 12 points had been resolved."}, {"bbox": [81, 1458, 1164, 1516], "category": "Text", "text": "**In conclusion, the public finance management reform strategy is sufficiently relevant and credible, including on domestic revenue mobilisation, and the eligibility criterion is met.**"}, {"bbox": [85, 1632, 498, 1656], "category": "Footnote", "text": "²⁶ Source: CBS Caribbean Netherlands. Statline."}, {"bbox": [85, 1656, 763, 1683], "category": "Footnote", "text": "²⁷ Source: Budget Proposal 2023, section 3.1, p.10 and section 3.3.4.11, p.48,49."}, {"bbox": [1038, 1682, 1143, 1706], "category": "Page-footer", "text": "Page 9 of 25"}]