During a press conference, on August 18, 2022, the government of Aruba announced that the implementation of a VAT system as per January 1, 2023, will be postponed. The VAT system was intended to replace the current BBO/BAVP/BAZV system. Instead, in light of the current financial situation of Aruba, the Aruban government considers to increase the tax rate imposed under the current BBO/BAVP/BAZV system with 1% or 1.5% to a combined levy of 7% or 7.5% in total. Further updates on this tax rate increase are expected later this year.
The postponement is prompted by concerns from the business community regarding the enforceability of the VAT system as per 1 January 2023 as well as the predicted inflationary effect resulting from the VAT system. In an effort to investigate the feasibility of the implementation of the VAT system as per 1 January 2024, the government of Aruba will start discussions with various stakeholder in due course.
Note: The above notice has not yet been formalized by the government of Aruba. In case of further updates, we will inform you accordingly.