What is the sales tax in Aruba?
What is the sales tax in Aruba?
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.
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."
IMF Recommends VAT For Aruba, by Phillip Morton, Investors Offshore.com
Last updated 31 hours ago | Thursday, September 16, 2010
what about tax on private rentals of houses in Aruba? What are the rules?