The latest news regarding cost increases related to Aruba’s recently implemented tax reform.
The government published a decree that increases certain excise duties, as of January 1st, 2019. These are the “sin taxes” the MinPres referred to, intended to increase government revenue while simultaneously encourage us to consume LESS alcohol and cigarettes.
Of course, these will affect costs for the import of products sold to visitors as well.
AHATA did the homework for me and checked which products the codes in the decree refer to, and concluded that the excise duty increases are as follows:
Wine and Vermouth (made of grapes): Increase of 8%.
Cider (pear, apple, pineapple, honey): Increase of 333%.
Other ciders: Increase of 188%.
Tobacco products: Change from 57% to Awg 211.50 per kg.
Distilled alcohol products: Increase of 44%.
Of course, we have to see how this translates at the cash register, but as far as cigarette go, I say, give them up!
My accountant friends are warning, this considerable increase will trigger inflation, which we previously avoided, then soon labor unions will be demanding salary increases.
Well, it is a fact, accountants aren’t funny!
The full text of the Dutch decree, in English courtesy of Google Translate
COUNCIL DECISION, containing general measures, of 20 December 2018 to implement articles 6, first paragraph, of the National Ordinance, regarding the rate of import duties (AB 2002 no. 120) and article 7a, first paragraph, of the National Ordinance excise duty on spirits (AB 1991 no. GT 27) (adjustment of import duties wine, tobacco and spirits)
Published, December 21, 2018, The Minister of Justice, Security and Integration, A.C.G. Bikker
Page 2 Official Gazette of Aruba 2018 No. 78
IN THE NAME OF THE KING!
THE GOVERNOR of Aruba, having considered: that it is desirable to implement the recommendation of the International Monetary Fund (IMF) in its September 2018 report to increase the levy on wine, tobacco and spirits, consumer goods the use of which should be discouraged from a point of view of public health. Having regard to:
Article 6, first paragraph, of the National Ordinance rate of import duties (AB 2002 No. 120);
Article 7a, first paragraph, of the National Ordinance on excise duty on spirits (AB 1991 no. GT 27);
Having heard the Advisory Board, decided:
In the appendix of the National Ordinance tariff of import duties (AB 2002 no. 120), the following changes are made:
Page 3 Official Gazette of Aruba 2018 No. 78
A in tariff headings 2204.1090, 2204.2100, 2204.2900, 2204.3000, 2205.1000 and 2205.9000 the amount “Awg 400, -” each time replaced by: Awg 433, -;
B in tariff item 2206.0010 the amount “Awg 100, -” shall be replaced by: Awg 433, -;
C in tariff item 2206.0090 the amount “Awg 150, -” shall be replaced by: Awg 433, -;
D in tariff heading 2403, “57%” is replaced by: Awg 211.50 per kg;
In Article 7, first paragraph, of the National Ordinance on excise duty on spirits (AB 1991 no. GT 27) the amount of “Awg 1.844, -” is replaced by: Awg 2.653, -;
This national decree will take effect on 1 January 2019.
Given at Oranjestad, December 20, 2018, by the Governor of Aruba J.A. Boekhoudt
The Minister of Finance, Economic Affairs and Culture, X.J. Ruiz-Maduro;
The Minister of Justice, Security and Integration, A.C.G. Bikker