Phasing Out of BBO

[Arubalisa]

"81 million to improve buying power
9 Nov, 2009, 07:19 (GMT -04:00)
http://www.amigoe.com/artman/publish/artikel_64908.php

ORANJESTAD — Last Friday the cabinet had decided to invest 81 million florins in a series of measures to improve the buying power. As previously reported, this decision was taken to phase out the sales tax (‘bbo’) during the course of two years and increase the relief.

The phasing out of the bbo will cost the treasury 76 million florins, according to the cabinet. As of January, the cabinet will halve the bbo of 3 percent to 1.5 percent. “This will have consequences for the costs within the family as well as for the expenditures of shops and companies. For 2010, this will imply that minimal 4.5 percent less tax will be levied on many goods, in particular those with accumulative steps” according to the Mike Eman-cabinet.

The bbo should be removed entirely the following year and the cabinet expects ‘at least 9 percent’ less tax on goods and services. Premier Mike Eman (AVP) informed the Amigoe that he was convinced that companies would actually lower their prices once they realize that the sales tax definitely disappears.

The cabinet further states that the removal of the sales tax will not only be mitigation for companies and citizens, but will also contribute to stimulating the national demand and strengthening of the competitiveness of Aruba on the tourist markets.

Relief
The cabinet already announces now that the relief and social security benefit will be increased with 25 percent per January 1st, and the implementation of a schoolchildren allowance of 100 florins per month per school going child with families that depend on relief as their source of income. The cabinet will be allocating 5 millions for the aforementioned. “The fact that an increasing part of the households on Aruba with a relief income, cannot survive or are barely capable of such, deserves our urgent attention” according to the cabinet. It bases this fact on a budgetary research in 2006 by the Central Bureau of Statistics, from which it appears that households had lost approx. 21 percent on spending power from 1998 until 2006. “This regarded the situation before the introduction of the bbo because the spending power had decreased further afterwards”, as Eman had stated in a previous interview with this newspaper."

[Tom and Karen]

Good start for the Green Party.

Now, if they can only stop the Ritz!!!

[Eagle Beach Boy]

Originally Posted by Tom & Karen

Good start for the Green Party.

Now, if they can only stop the Ritz!!!

And sort our DIMAS for 90 day stays.

[Andrea J.]

and give me citizenship and a home and a check

ahhh to dream huh?

[Enz]

I quote: "Premier Mike Eman (AVP) informed the Amigoe that he was convinced that companies would actually lower their prices once they realize that the sales tax definitely disappears."
I think that he's dreaming. The tax is usually added on after the cost of the goods - so the cost for a retailer will not change. If the cost is build into the product - I don't think that the retailer is going to go to the hassle of changing all of the prices for 3%. Maybe I'm wrong - I hope so.

[Tom and Karen]

Originally Posted by Enz

I quote: "Premier Mike Eman (AVP) informed the Amigoe that he was convinced that companies would actually lower their prices once they realize that the sales tax definitely disappears."
I think that he's dreaming. The tax is usually added on after the cost of the goods - so the cost for a retailer will not change. If the cost is build into the product - I don't think that the retailer is going to go to the hassle of changing all of the prices for 3%. Maybe I'm wrong - I hope so.

Some companies did put the BBO tax in their price. Hopefully, they will remove it. We will probably never know.

[islandj]

I cant wait till they remove the BBO, once its gone it will be almost 10% cheaper on items for me here. You have to remember every step they charge the 3% on item, so by the time you buy the item your paying almost 10% in taxes on it.

[fattypatty]

Originally Posted by islandj

I cant wait till they remove the BBO, once its gone it will be almost 10% cheaper on items for me here. You have to remember every step they charge the 3% on item, so by the time you buy the item your paying almost 10% in taxes on it.

i'm willing to bet that we will only see a 5% reduction at most. companies will learn to eat the other 5% savings for themselves. why lower the price so drastically when your customers were willing to pay that much anyhow?

[DANNYO]

Originally Posted by Tom & Karen

Good start for the Green Party.

Now, if they can only stop the Ritz!!!

Is that still in the works.I haven't heard anything about that lately.

[lizzardo]

I don't know about where the Ritz is in it's project. From what I have read on the boards - the Marriott only shows the location where it will be and said they were in the process of raising money. If they don't have their "design" approved yet -
Mike could have an impact because of the issue of the wind and shutting down the beloved kite surfers.

So he could make things "difficult" for them and the approval process to go ahead. All I can do is hope!!!