January 15, 2013 10:52 AM
WILLEMSTAD--A group of storekeepers in Punda is concerned about the upcoming increase in Curaçao's OB sales tax for luxury products like perfume, jewellery and electronics from 6 to 9 per cent. They believe the measure will have far-reaching consequences.
For example, Central Bank will receive less foreign currency from tourists and government will actually miss out on revenues from sales tax. Only shops on board cruise ships and at the airport will benefit, because they can sell these luxury products tax-free.
It will also be more attractive to do business on Aruba, because the sales tax there is only 1.5 per cent.
Some businesses have already been compensating for the general sales tax having gone up from 5 to 6 percent with their branches on other islands, which has consequences for employment on Curaçao. The merchants are disappointed that entrepreneurs didn't have a say in the measure, which according to government is one of many to reorganise the public finances of Curaçao.
Late last year Minister of Finance José Jardim announced a 9 per cent sales tax on several articles and services per March 1, providing Parliament agreed.
According to a circulating draft list, it regards vehicles, with the exception of police cars and fire engines; yachts and other pleasure and sports boats; convenience food; soft drinks, with the exception of fruit juices; alcoholic beverages; tobacco; cosmetics and make-up; trinkets, jewellery and ornaments; perfumes, scents and lavatory fresheners; digital equipment for films, games and data; computers and peripheral equipment; mobile telephones and other communication means; weapons and ammunition; fireworks and Christmas trees.
Nine per cent sales tax will also be levied on the rental of vehicles, yachts and other pleasure and sports boats; recreational and entertainment trips by vehicles and boats; scuba diving; entrance fee to cinemas, expos, adult entertainment; permanent recreational facilities, expositions and exhibitions; rental of films and games; service charge in the catering industry, and on lotteries, lottery tickets, stakes on numbers and bingo.
There will also be a 7 per cent sales tax for insurances and -according to the draft list- accommodation in hotels, lodgings, pensions, apartments, houses, etc., but also timeshare and guest accommodations for short periods.
On the other hand several articles will be exempted from sales tax, such as water, gas and electricity, basic foods, medical services, public transport and non-commercial goods and services.