Published On: Thu, Jan 24th, 2013

Penha closes branch in former Hyatt Hotel

WILLEMSTAD – The Penha branch at the Santa Barbara Beach & Golf Resort, formerly the Hyatt, will close around the end of April, and the Montblanc-shop on Curaçao (part of the Penha-group) will probably also disappear. He wants the government to study the position of the ‘duty-free sector’ in the plans on the differentiation of the sales tax more thoroughly.The branch in the former Hyatt Hotel is one of the nine shops that Penha owns on Curaçao. The contract has been cancelled in the meantime. The branch will close late April or early May. It is not the first time that Jonckheer sounds the alarm. According to him, the sales tax increase from 5 to 6 percent had already been difficult. He now predicts that the planned introduction of the 9 percent sales tax on luxury articles per March 1st will put the margins of the duty-free products under pressure to the extent that it will slowly but surely make business for the retailers impossible and force them to leave Curaçao. Earlier on he indicated to shift the focus to other locations in the Caribbean area where the sales tax rates are lower.

Punda free zone

Jonckheer urgently appeals to the government to study the position of the ‘duty-free sector’ in the economy plans more thoroughly. “Especially also because less people are visiting the island and those who visit the island spend less. In my opinion there are three possibilities: increase the gross national product. This means attracting people to reside on the island; exempting tourists from sales tax, or also making Punda a free zone, because those 3 to 4 million that is to come from our sector with this measure will eventually only cost money and be more painful for this society. One forgets that the duty-free products are the reason why companies like Penha are interesting for tourists. We offer perfumes, jewelry, make-up and other luxury products at 85 percent of the sales price of these products in the United States and Europe. To keep those prices attractive we, as entrepreneurs in this sector, have coughed up the sales tax ourselves. However, nobody can afford to cough up the 9 percent sales tax.”

Specify

The director of Penha thinks the government doesn’t actually realize what the consequences are and certainly not the special position that the duty-free retailers have in the economic climate of the country. “It takes years to get a ‘brand’ to the island. It took me two and a half years to get Victoria’s Secret to Curaçao. All efforts are now suddenly ruined with such actions – without really realizing what the consequences are. Once a brand has left the island it’ll take years to recover that. By then, we are no longer attractive. Mind you, I haven’t even started mentioning the bureaucratic nonsense involved with these plans. I have 45,000 articles that I have to specify. Most articles fall under 6 percent and the other under 9 percent sales tax. I cannot explain this to my customers.”

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