Aruba Urged To Reform Indirect Tax Regime

by Mary Swire, Tax-News.com, Hong Kong

16 June 2017

Caribbean territory Aruba should more broadly apply fewer rates of tax, and in particular look to increase the contribution of sales taxes, the International Monetary Fund has said (IMF).

The Fund said that Aruba should rely more heavily on indirect taxes. Currently, Aruba levies a 1.5 percent turnover tax on domestic supplies of goods and some services, and applies a two percent health levy with a similar scope. Exporters and foreign exports are typically exempt from the turnover tax.

The IMF specifically proposed that the territory could raise the health levy from two percent.

The IMF said that authorities in Aruba had rejected the proposals, noting that the Government does not "see much room for additional structural policies, such as increasing different tax rates or cutting current public spending in 2017."

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