Phasing Out of BBO

[Arubaguy]

Well what I last read in the local newspapers was that the last government as a resentment and try to made it even more difficult and hinder even more their succes, they immediatly gave the Venezuelan group who are the ones buiolding The Ritz a go ahead!. But we will see if its still gonna be legal as AVP is claiming its not legal and looking into dissolving the contract!!. We can only hope it goes through Aruba does not need any more hotels.

[lizzardo]

Isn't the Ritz owned by the Marriott (a US firm) ? I remember Mr Marriott came to the island when the deal was done. How is a Venezuelan group involved?

[Arubalisa]

Originally Posted by lizzardo

Isn't the Ritz owned by the Marriott (a US firm) ? I remember Mr Marriott came to the island when the deal was done. How is a Venezuelan group involved?

Yes, Marriott is a U.S. firm headquarted in Annapolis MD

Originally Posted by lizzardo

http://www.aruba.com/forum/f9/ritz-37022/#post132280

"Ritz-Carlton first five-star hotel
19 Feb, 2009, 08:37 (GMT -04:00)


Bill Marriot shakes hands with Prime Minister Nelson Oduber after the plans for the five star Ritz-Carlton in Aruba became definate.

ORANJESTAD – After four years of negotiations, the Aruban government has finally her first five-star hotel, The Ritz-Carlton. The hotel with 320 rooms will come next to the Marriott resort that is also the parent company of this luxurious hotel chain. The 360 million florins investment is officially done by the Venezuelan group Desarrollos Hotelco S.A. that turned out to be the best from a public tender.

Bill Marriott, project puller Walter Stipa of the investment group, Premier Nelson Oduber, Finance-minister Nilo Swaen, and Tourism-minister Edison Briesen gathered in the Marriott-hotel to celebrate the agreement. It was a big party for especially Aruba; the island has been trying for more than 15 years to bring in a five-star hotel. However, investors pulled out or never came with sufficient money at the end. The Oduber-cabinet decided after criticism from the opposition and the business life, to start a public tender in 2007. Especially because governments of a different colour (AVP) have caused big financial problems in the past, by giving guarantees and tax exemptions to hotels.

A committee considered the plans of the Venezuelan investment group/Marriott as the best during a tender. The hotel will have to rise now on the popular beach of the Fisherman’s Huts.

The Oduber government has received a lot of criticism in the past years for wanting to build a new hotel on this beach. The Chamber of Commerce, employers’ association, and also experts inside the government had pointed the government out on several studies and reports that Aruba has a lot of mass hotels like this one. Besides, they do not deliver the desired high-quality employment, but only more cheap workers from abroad. The infrastructure is also no longer adequate for this.

Also the environmental movement is very much worried about the consequences for the protected turtle species that nest on the Fisherman’s Huts every year. The movement says that very little attention is given to environmental protection. At least three hundred meter free beach will be gone if the new hotel comes.

Premier Oduber says that the hotel project is part of the economic diversification policy of the government to attract wealthier tourists to Aruba. He is extra proud of the fact that in this economic difficult time, they still managed to bring in such huge investment.

“Aruba needs construction work”, says Oduber as a result of the signals that also the building sector is already suffering under the crisis. “We can sit down and deliberate, but the answer is construction work. We can’t have the aspiration and pretention like the rich countries that can invest millions of tax money as economic way out. Our means are too limited for that.” The premier hopes that the stimulation package of the American president Barack Obama will pay off in Aruba.

Boycot
The first action group has already started with protests against the build of the five-star hotel. Rainbow Warriors threatens with a worldwide boycott of Marriott and all her chains. The movement has been writing letters to The Ritz Carlton to ask attention for the environmental problem. The hotel chain has answered Rainbow in 2006, stating that with all the projects, they try to avoid damaging effects for the environment"

[Arubalisa]

Government maintains bbo
16 Sep, 2010, 10:57 (GMT -04:00)http://www.amigoe.com/artman/publish/artikel_78280.php

"ORANJESTAD — The government decided to maintain the sales tax (bbo) for the time being. They lowered the tax to 1.5 percent this year with the intention to rescind this entirely starting next year. The government decided to put the repeal of the bbo on ice due to the recession and the consequential declining government revenues.

The decision was made after the consultation with the social partners in the so-called Social Dialogue. Minister of Finances, Mike de Meza (AVP) also added that the affects of the recently introduced lowering of the bbo were not visible. “We hear this from the entrepreneurs and the consumers. We find this strange though, as that 1.5 percent represents an amount of 70 to 80 million florins. Where did that amount go then?” Nevertheless, the Minister thinks that amount remained in the economy and that presumable price increases – expected yearly as a result of the international developments – were ‘absorbed’ with such, “because otherwise the prices would have been higher now, at least 1.5 percent.” Therefore, the money has not evaporated, but remained in our economy for the benefit of the commerce and population.”

By maintaining the bbo, the government wanted to ensure there would still be sufficient left to let the economy grow and to balance the government finances more. Since the recession, the Central Bank already announced a decrease of the bbo revenues. That decline increased the past six months due to the halving of the tax rate. According to the Bank, the bbo revenues subsequently decreased during the first six months with 33 million florins (41.9 percent) compared to the same period last year.

Tax reformation
Representatives from International Monetary Funds (IMF) met with the government last week for a biennial evaluation. The government already received the interim findings last week. According to De Meza, IMF is positive on amongst others the government’s plans to improve the buying power, amongst which the halving of the bbo. Simultaneously, the institute quoted items of concern with regard to the government finances, the Minister admits. The government explained which measures they would take to get these finances in balance again. “However, IMF also stated that these may still not be sufficient and that perhaps one needed to take more measures,” [see link to second article below] De Meza.

According to the Minister of Finances, the government is working hard to economize on the expenditures of the government. Just as in the government budget of this year, considerably less expenditures will be included in the budgets for the next years for personnel (by means of a freeze on the recruitment of personnel), goods and services. In addition, the government wants to bring the declined government revenues to the same level again.

According to the Minister, this will be done amongst others by setting up committees, in which also trade unions and employers are represented, who are to tackle tax reformation plans. For that matter, this was agreed also during the Social Dialogue. “The objective is to increase the government revenues in a well-considered way by means of excise taxes, import taxes and other taxes” according to the Minister of Finances. In any case, the recently concluded agreement mentions that the excise taxes will increase on luxurious goods, beer, liquors and tobacco."

[Arubalisa]

IMF Recommends VAT For Aruba, by Phillip Morton, Investors Offshore.com
Last updated 31 hours ago | Thursday, September 16, 2010

[Chadd]

Replacing the sales tax with a VAT would increase costs to the consumers.