Two important letters were sent out this week by AHATA, the Aruba Hotel & Tourism Association. Both letters had wide distributions in government circles, one related to the recently imposed BBO at the border and the other addressed the regulation-void for commercial watersports activities at Aruba’s popular beaches.
AHATA has recently dedicated some of its efforts to important community projects, designed to elevate and improve the island’s tourist product. One of them, Find Your Passion, is a campaign designed to guide job-seekers find employment in the industry, by educating them regarding the intricate job application process from CV presentation to grooming and interview preparedness. The other project spearheaded by AHATA was in the form of donations to Enseñansa pa Empleo, an adult professional training program, and the other to the culinary school in San Nicolas. Both donations, in collaboration with ASD, a hotel and restaurant supply & distribution outlet, provided dishes and glassware as well as updated kitchen equipment, to help train future industry servers, and chefs. AHATA’s interest in and support of Enseñansa pa Empleo and the culinary school showcases the organization’s desire to nurture education, with the goal of enhancing and upgrading the local workforce.
Between feel good projects, the organization also speaks, loudly, on behalf of the hotels and the island’s private sector businesses, encouraging government to do the right, well-thought-out thing, instead of focusing on low-lying fruit and fast fixes.
As you know, effective August 1st, a 7% tax was imposed at the border on all goods imported, referred to as BBO at the border.
From a Grant Thornton newsletter: “Entrepreneurs are allowed to deduct the paid BBO on imported goods if the BBO relates to trade goods, which is defined as unprocessed goods that are meant for resale. Although the government intended to modernize and simplify import duties by introducing the new law, this definition and its scope raised quite a few questions.” End of quote.
You now know that the new decree confused many and consequently, the food and beverage sector was especially unsure whether it is allowed to offset the BBO paid on imported goods, or not.
The Aruba Food & Beverage Association (AFBA) and Aruba Hotel and Tourism Association (AHATA) asked for clarifications, and it turned out that fast food restaurants that send you packing with a burger, napkins and packets of sauce can offset the BBO paid at the border and restaurants that serve you nicely, on white linen, to candle light, can’t.
AHATA wrote to the Minister of Finance and Culture this week, pointing out the lack of fairness and equal treatment under the new law. In the letter it requested an adjustment aimed at mitigating the adverse impacts on the restaurants’ cost of doing business, that ultimately would benefit both the industry and its consumers.
Don’t ask me complicated questions, because I don’t understand it that well, but it is a fact that as it now stands, the Government of Aruba favors a certain type of food preparation and discriminates against a large segment of the restaurant sector.
With this new legislation, says AHATA, the Government of Aruba created more confusion as to WHICH restaurants/food preparation business can offset the BBO paid on imports and which cannot.
It just doesn’t sound right that take-out food sold from a drive-thru window, is entitled to a full offset. And what about the air-conditioned dining rooms of those fast food outlets?
And…. what about the restaurants that offer both sit down service AND take-out?
The new rules make it impossible for the tax paying businessman to determine whether or not an offset is allowed, and according to AHATA all restaurants should be allowed to offset the BBO paid at import, to prevent discriminatory treatment.
And that’s where we are! If you hand a box through a window, you may offset 7%, if you serve in an elegant ambiance, you must eat it. And that’s against the principle of equality and won’t help achieve a higher level of food and beverage quality on the island.
We’re waiting for an answer to hopefully grant all restaurants the BBO offset for all imported goods intended to be resold.
More tomorrow.
