Published On: Fri, Jan 11th, 2013

Businesses concerned about sales tax increase

WILLEMSTAD – A group of storekeepers in Punda are concerned about the upcoming increase in sales tax (ob) for luxury products, like perfume, jewelry and electronics, from 6 to 9 percent. The group believes the tax measure will have far-reaching consequences.For instance, the Central Bank will receive less foreign currency from the tourists. The government will consequently miss out on revenues from sales tax. Cruise ships and shops at the airport will benefit because they can sell these luxury products tax-free. It is also more attractive to do business on Aruba because of the sales tax being only 1.5 percent. Some companies are already compensating their losses in branches on other islands in the Caribbean after the sales tax had gone up from 5 to 6 percent. This will have consequences for employment on Curaçao, according to the storekeepers, who are disappointed that entrepreneurs didn’t have a say in the measure, which according to the government is one of many in order to reorganize the finances of Curaçao.

9 percent

Late last year Minister of Finance, José Jardim, announced a 9-percent sales tax on several articles and services per March 1st providing the Parliament agrees. According to a circulating draft list it regards the goods: vehicles, with the exception of police cars, fire engines and ambulances, and transport of passengers; yachts and other pleasure & sports boats; convenience food; soft drinks with the exception of fruit juices; alcoholic beverages; tobacco; cosmetics and make-up; trinkets, jewelry and ornaments; perfumes, scents and lavatory fresheners; digital equipment for films, games & data; computers and peripheral equipment; mobile telephones and other communication means; weapons and ammunition; firework and Christmas trees.

Services

Nine percent sales tax will be levied on the rental of vehicles, yachts and other pleasure & sports boats; recreational and entertainment trips by vehicles and boats; scuba diving; entrance fee to cinemas, expos, erotic entertainment; permanent recreational facilities, expositions and exhibitions; rental of films and games; service charge in the catering industry, and on lotteries, lottery tickets, stakes on numbers and bingo.

There will also be a 7-percent sales tax for insurances, and according to the draft list, accommodation in hotels, lodgings, pensions, apartments, houses, etc., but also timeshare and guest accommodations for short periods. On the other hand several articles will be exempted from sales tax, such as water, gas and electricity, elementary food, medical services, public transport and non-commercial goods and services.

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