In a recent AHATA meeting the good people from EY, among them Senior Manager Tax, Mireille de Miranda, updated the interested forum about the recent tax reform, starting with Ground Tax.
What you should also know:
The 60k exemption and the 0.4% rate are gone, and the new formalities include an added filing. In the event that you renovate, demolish, or change the property’s designation, you are required to report to GOA that you just upgraded the real estate, thus you become eligible for a new assessment, higher, imposed the following year. Failing to report any construction and rise in property value may result in 100% fine!
So, beside the song and dance with the notary, and the song and dance with DIP for building permits, you are also required to fill in another set of papers for another GOA department filing, regarding the same exact project.
Basically, you buy a piece of property, settle all back-taxes, yours and the seller’s, the deed is passed, money changes hands, you file for renovations, you go through hell and back getting the project off the ground, then you have to file the new look with GOA and wait for their refreshed assessment, chop-chop, within two months.
Following this new twist, I spoke to one of my tax-expert friends, outside the EY circle.
He expressed his total frustration with the slow pace of the much-awaited tax reform, and stated there are just too many taxes to keep up with, and the bureaucracy is killing business.
According to him, Aruba would require just THREE taxes, the rest can be abolished, nixed, eradicated.
Import duties: Goa’s main source of income, tax everything at the gate. Easy to control, it either comes in by ship or by plane, onetime STEEP levy. Move a handful of the 400 tax department employees to Barcadera, place some at the airport, and re-assign, the rest.
Tourist Tax: Continue to levy a destination fee on all room revenues paid by visitors.
Tax Dividends paid to foreign companies doing business here: Collect a tax on all moneys earned by the resorts, or any foreign company, even if it never enters Aruba, and it is not difficult to track, since it is all recorded.
So basically, GOA gets import duties, we, the humble citizens pay more for ‘things,’ but we have NO income tax, and our employer can pay us more because he is NOT burdened by social benefits. We make more money? We spend it all in the local economy.
And the Import Duties levied pay for everything, AZV, trash collection, education, flower arrangements for GOA’s offices.
Did you run the numbers, I asked. No, he said, but many of my tax consultant friends support the idea, though it will take them our of business, with just a THREE TAX system all tax consultants will become redundant. So that’s good news.