I took a long Thanksgiving break and once I fell out of the habit of writing every day, it became hard to get back into it.
But I am back for now, and while I did not follow the news during my break, I did register that a GOA delegation went to the Netherlands to plead for the forgiveness of a 900 million florin loan, taken during the pandemic.
At the time, the low-interest or no-interest loans were given under the condition that the money would be repaid. The Netherlands also required other assurances, regarding the introduction of a country-budget-surplus in 2023, and an overall reduction of expenses.
Aruba maintains that it complied with all conditions, and is now begging for partial forgiveness, or a re-negotiation of terms.
My banker friends reassure me that had I taken a substantial loan at any of the island’s financial institutions, I would have had to repay it, no forgiveness, or suffer severe consequences. I could also refinance, but that would cost me more money. I guess it works differently for countries.
The fact that Aruba complied is arguable. When the chief financial supervisor, Gradus, resigns his post because he feels he is getting nowhere, it is a clear indication that contrary’s to Aruba’s claim, nothing really happened, and while the Dutch compiled a detailed handbook as to how to institute change – the landspakket – their good advice has been followed marginally.
Another indicator that nothing really happened is the fact that the opposition parties walked out of parliament as it was discussing the country’s budget. A clear sign of distrust.
On the other hand, GOA did send parliament a detailed plan to raise our taxes. The plan is to be ratified soon.
The proposed changes in the 2023 tax plan, effective January 1st, now in the form of draft legislation, increase the burden on the public, while letting GOA off the hook.
The most drastic change is the rate of the BBO/BAZV that will be increased with 1% to 7%.
If you are a small entrepreneur, the amount of Awg 50,000, will not be subject to BBO/BAZV. It was Awg 84,000, previously.
I saw an in-depth look at the incoming changes of the tax plan 2023, in a newsletter recently circulated by Grant Thornton.
The changes are numerous, including the hilarious purchase power premium paid to pensioners that will increase from Awg 125 to Awg 175. We will see changes in wage tax, income tax, depreciation, authorized deductions, profit tax, inheritance, real estate transfer, ground tax, dividends, and more.
Tourists will see an increase in the tourist levy from 9.5% to 12.5% with different amounts charged on timeshare units, and all inclusive stays, but the special car rental levy will be retroactively abolished. I am unclear how this will be done.
Icing on the cake: The Minister of Economic Affairs has organized a number of free of charge public sessions to teach citizens about household fiscal management, under the title, Finansas den mi Hogar.
At a presentation in Paradera he revealed that 3 out of 10 local households spend more than they earn. He recommended to his audience to create a budget, corresponding to the household income, advice he dispenses to citizens but apparently not to GOA. He lobbied for daily overview of expenses and their prioritization. The minister concluded that a budget requires discipline. Indeed.
No wonder citizens spend more than they make, they follow GOA’s lead.
