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Local Items: Another flat tax announcement
Bonaire Talk: Local Items: Archives: Archives 2009: Archives 07-01-2009 to 12-31-2009: Another flat tax announcement
Top of pagePrevious messageNext messageBottom of page Link to this message  By Bruce Zavon (BonaireTalker - Post #91) on Saturday, November 14, 2009 - 4:55 pm:     Edit PostPrint Post

Maybe? Same sort of proposal as discussed before a low income tax rate of about 10-15% (a huge drop from the current progressive rates of up to 47%) plus the AOV/AVBZ taxes on salaries. OB will go from 5 to 8% if it all comes to pass. I haven't seen the details yet. From the Amigoe (Thanks Ms. Porter for the heads up):

http://www.amigoe.com/artman/publish/artikel_65104.php

"KRALENDIJK — There will be one tariff for tax on wages and income tax in the new tax system for the BES-Islands. The enactment is currently with the Lower Chamber. This so-called ‘flat tax’ will amount to 30.4 percent and includes premiums. The first 16.000 guilders (9.000 dollars) on wages and income per year will be exempted from taxation. Bonaire currently has a graded tax system for income tax and tax on wages.

In broad outlines, the Commissioner for the BES-Islands, Henk Kamp, had sketched the contents of the new tax system during an informatory gathering of the Regional Service Center (RSC) in the community center of Tera Kòrá yesterday evening. There will be a ‘child-exemption’ of 1250 dollars per child with a maximum of 2500 dollars, and the sales tax (OB) will be referred to as ‘general spending tax’ and will increase from 5 to 8 percent. On the other hand, the import duties will decrease to 0 percent. However, the import duties on vehicles will remain with a tariff of 25 percent. In addition, the real estate tax will amount to 0.8 percent. However, the latter is not applicable for the privately owned house, kunukuhuis with a maximum of 90.000 guilders) or for example farming land."

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Susan - www.bsdme.info (Experienced BonaireTalker - Post #664) on Sunday, November 15, 2009 - 7:28 am:     Edit PostPrint Post

;-))

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By George Blanchard (Experienced BonaireTalker - Post #340) on Sunday, November 15, 2009 - 6:20 pm:     Edit PostPrint Post

What does all this mean for the visitor? I assume higher sales taxes.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Bruce Zavon (BonaireTalker - Post #92) on Sunday, November 15, 2009 - 8:15 pm:     Edit PostPrint Post

Yep. But being from Florida, a state with no income tax but a good sales tax, "tax the tourist" is always popular. Used to live in Seattle and now when I go back and rent a car they charge double sales tax!! But are you really not gonna come because some of the things you buy (not everything) will cost 3% more? It will hit locals much more.

I think it's primarily a function of a "simpler to collect" system, like VAT in Europe. Also will attract (instead of discourage) higher income residents. Gotta be competitive with the rest of the Caribbean. Just my 2 cents.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By elaine sculley (Extraordinary BonaireTalker - Post #1210) on Monday, November 16, 2009 - 1:03 am:     Edit PostPrint Post

poor bonaire don't like the changes at all. big ships coming in sometimes 2 @ a time. building all over the place. like it when it was a simple place. it won't stop me from coming but still don't like it
es

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By George Blanchard (Experienced BonaireTalker - Post #342) on Monday, November 16, 2009 - 2:34 pm:     Edit PostPrint Post

We'll still come to Bonaire but just wondering what will be taxes. Is food subject to tax? Are groceries taxable? I am sure accommodations will be taxed at the higher rate.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Ruth van Tilburg (Extraordinary BonaireTalker - Post #1177) on Monday, November 16, 2009 - 4:53 pm:     Edit PostPrint Post

Groceries (and dining out) have been taxed since the start, along with almost every item or service you can purchase. What we pay for services, such as lawyer's and accountant's fees, most imports and even rent, have also been subject to the existing 5% (OB) sales tax. The new proposed sales tax will be 8% (ABB)...however, I think the big difference will be where we (the businesses collecting these taxes) pay them. Currently, the 5% OB tax goes to "Land" (Curacao/central govt), as do all import duties charged (also proposed is the elimination of import duties). The 8% ABB tax will be collected by "Eiland" (Bonaire).

In a way it will be more fair to consumers because right now, the 5% is being charged twice or even three times: for example,
1) when an item is imported, 5% is charged to the original customer, (a wholesaler), on top of import duties and shipping costs.
2) This item is then resold by the wholesaler to a retailer, and another 5% is charged;
3) The retailer (for example, a restaurant) purchases and prepares the item for further sale, and charges 5% again.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Sparty (Experienced BonaireTalker - Post #265) on Monday, November 16, 2009 - 11:34 pm:     Edit PostPrint Post

I am a bit confused regarding Ruth's description of the current tax situation. Normally a sales tax is only applied at the time of sale to the final consumer and is not charged at the wholesale levels. If the 5% is being charged at each level, is it on total value or is it a "value added tax" and only charged on the increase in value at each step?

As someone who spent many years in the tax business, it is my opinion that the only ones that benefit from a VAT are the politicians. All the taxes collected at the various value added steps get rolled into the final price to the consumer anyway, since the manufacturers and wholesalers just pass it on. It is much simpler to just have a sales tax at the point of final sale to the consumer. Collecting at each step of the way under a VAT just causes more bookeeping for everyone, including the government agencies that have to audit and enforce the tax laws. However, that way it is not "hidden" and the politicians don't like to catch the resulting flack when the consumers see a high sales tax. They much more prefer a hidden tax.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Ruth van Tilburg (Extraordinary BonaireTalker - Post #1178) on Tuesday, November 17, 2009 - 9:36 am:     Edit PostPrint Post

Yep Sparty, the 5% is being charged each time someone or a company buys an item, from the time it lands on Bonaire (on top of import duties). Some wholesalers were given a tax break not to have to pay the 5% at the time of import, but like you said, lots of paperwork, etc.; the middle-man/retailer still pays it, as does the final destination (I hope this part changes too; if it doesn't, there will remain 2 layers of taxes-steps 2 & 3 above). And all of that money goes to Curacao. With Bonaire breaking away from Curacao, where tax money goes has to be re-thunk. ;-p

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By George Blanchard (Experienced BonaireTalker - Post #344) on Tuesday, November 17, 2009 - 12:48 pm:     Edit PostPrint Post

Ruth, thank you for your explanation. Just like the States, the tax man always has his hand out.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Vincent Vethaak (BonaireTalker - Post #34) on Wednesday, November 18, 2009 - 9:04 am:     Edit PostPrint Post

Hi Bruce,

Everything is still to be finalized. This is the 4th draw.
http://www.pearlfmradio.com/index.php?option=com_content&task=view&id=2916&Itemid=65

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Bruce Zavon (BonaireTalker - Post #93) on Wednesday, November 18, 2009 - 9:50 am:     Edit PostPrint Post

Thanks Vincent, good article. I'm sure Bonaire has also had its share of people who consider it a "tax free land" because the enforcement of the income tax laws has been lax or inconsistent. It's a complex world and a small office like we have on Bonaire couldn't possibly police it. This is the main reason for switching to more reliance on an sales tax based system, and in this island's case I think it makes sense. Personally I think there should be an exemption for basic necessities like food at the grocery store and drugs at the pharmacy. But I don't have a vote, so I'll just be curious to see how it turns out. Hopefully some decision soon; uncertainty is a bad thing.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Vincent Vethaak (BonaireTalker - Post #35) on Wednesday, November 18, 2009 - 9:53 am:     Edit PostPrint Post

For future BES reference this site may be of help:

http://www.minbzk.nl/english/subjects/aruba-and-the/new-status-for-the/faqs-about-the-bes

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Ruth van Tilburg (Extraordinary BonaireTalker - Post #1180) on Wednesday, November 18, 2009 - 10:42 am:     Edit PostPrint Post

Some basic foods are tax exempt now, like eggs, powdered milk, plain bread (I think-it's a small list if I remember correctly; I wish more were, especially fruits & vegetables); also, prescriptions are tax exempt. If you buy medicine at the pharmacy without a doctor's prescription, then it is taxable.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Nicole Bouten (New BonaireTalk Poster - Post #1) on Monday, December 14, 2009 - 7:18 pm:     Edit PostPrint Post

Flat tax = loonbelasting + AOV + AVBZ or only loonbelasting?

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Bruce Zavon (BonaireTalker - Post #94) on Tuesday, December 15, 2009 - 10:29 am:     Edit PostPrint Post

If it goes forward, the current proposal is to combine the Loonbelsating/Income tax with the premium based taxes (AOV and AVBZ), so a flat 30.4% for all income (less the $9,000/NAF16,000 base) plus an exclusion of the first $5,000 of interest and $%,000 of dividends. If you are age 60 and over the rate is 3.6% on the first $36,000/NAF63,000, then 30.4%. Capital gains will now be subject to tax. Not sure about gains on rental property, whether the flat 35% deduction from gross rent and the passive investor/entrepreneur distinction will continue.

Presumably all on hold pending the referendum.

 

Top of pagePrevious messageNext messageBottom of page Link to this message  By Vincent Vethaak (BonaireTalker - Post #38) on Thursday, December 17, 2009 - 3:02 pm:     Edit PostPrint Post

The new proposed flat tax system on income is made easy comparing with today's progressive rates.( less calculation ). Unfortunately the result is practically the same. When you perform a calculation it differs only a few bucks ( the 4th draw ). So no big changes on income tax.
Like everybody I am curious when the new rules will be implemented.

 


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