New entities designed to help us cope

Ursell Arends, the Minister of the Environment had on several occasions made public his intention to privatize the island’s wastewater treatment, and as of recently his plants, in the form of a suggested law, have been sent to the Advisory Council, Raad van Advies.  Let’s see what the people with the common-sense would say about them.

The Rioolwaterzuiveringinstallatie, the RWZI plant, or Bubali Plas, has been a worrisome subject of conversation for years. But finally, at the beginning of 2023, the minister announced that his masterplan will be ready in March. A special committee worked on the plan in conjunction with Royal HasKoning DHV, a Dutch Engineering company.

I am not sure if indeed the masterplan was ready in March, but between completion and writing it into law, a few more months passed, and the decision to hand the RWZI assets over to a private entity is likely to happen, not in March 2023, but sometimes soon.

Meanwhile repairs are ongoing.

Incidentally in March 2013 we were informed that from then on, an Environmental Levy will be charged,  $3 a day per occupied room, earmarked for trash collection and disposal, including liquid waste. We have been paying dutifully for ten years, but the money went to the general ledger, perhaps now with a mega investment coming up the Environmental Levy will indeed help us pay for a brand new RWZI.

There will also be a Tourist Levy, I hear it’s modest, to help pay for that waste and trash project. The levy will be collected from our visitors.

The people with common-sense are reading the legal document, and will provide their learned opinion, shortly.

The Minister of Tourism also made some plans public, he proposed new HORECA permit fees, funds that will be funneled into a new authority, in charge of permit issuance and supervision under the Licensing Regulation. This new central supervisory body, the Aruba Quality & Hospitality Authority, AQHA, will be specifically responsibly for quality control and enforcement. It will be a  semi-public Sui Generis, also in charge of vacation rental permits, lodging, hotels, restaurants and bars, from start of finish, a one stop shop.

Since the AQHA must be self-sufficient, the question of fees is now revisited. I am hopeful they will reach consensus and not just launch of the program, in the first quarter of 2024, without consulting and informing their partners first.

The fee structure is naturally of great concern to operators. The industry is already saddled by a lodging tax, a tourism tax, and commissions to booking engines, before taking the operational expenses into consideration.

AQHA will be tasked with increasing tax compliance of the vacation rental sector, and the proper registration of such properties. The self-sufficient entity, will have a supervisory board to oversee its effectiveness.

As planned AQHA will be collecting annual license fees from all the HORECA establishments, and will tax accommodation according to the number of bedroom/hotel room operated. From what I understand it is between AFL 125 and AFL 275 per property per month.

You do the math. We reportedly currently have 4,671 vacation rentals, 3,256 timeshares, and about 8,000 hotel rooms.

The authority is possibly hoping that a great number of players will abandon the short-term rental field, unable to comply with permit requirements or unwilling to continue in view of the great expense.

We think this new authority will require many extra hands, to help process papers. Hopefully the new system will be simpler, and more efficient.

More useless administration? Political job creation?  Perhaps a smart move? Time will tell.

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September 30, 2023
Rona Coster