The way the government manages the informal market and tax collection in Aruba creates immense inefficiency and a disincentive for legal business owners. In this latest statement, strong emphasis was placed on the lack of will to enforce compliance (handhaving) on a small island and on the absurd way the system rewards bad payers while punishing those who comply.
Lack of enforcement on a 20-kilometer island
The president of United Merchants Aruba (CUA), Frans Ponson, severely questions how adequate control and enforcement cannot exist in a country just 20 kilometers long. “If the government can send four cars from the Aruba Security Service (Veiligheidsdienst Aruba) at night to drive around neighborhoods for 8 hours, how can you tell me we cannot find these illegal businesses?”
Instead of seeking out informal operators, the habit of successive governments is to always go after large, formal merchants because they are easy to audit. Even though 90% of the market consists of small business owners, no action is taken against the informal sector, leaving all other legal businesses at a competitive disadvantage.
A tax system that rewards bad payers
One of the most critical points presented is how the Tax Department (Belastingdienst) negotiates with non-compliant taxpayers. Currently, the system favors the one who does not pay:
• The bad payer: Goes without paying taxes for 5 years and then negotiates a better deal with the government, often receiving a 30% to 40% discount if paid in a single lump sum (one shot).
• The good payer: The person who complies on time every year receives no type of benefit or discount.
A call was made to completely shift this mindset: grant discounts or benefits to the merchant who pays their taxes on time this very year, thereby motivating bad payers to join the legal sector.
The absurdity of permits (vergunning)
This situation repeats itself in the granting of permits at the DOW (Dienst Openbare Werken) or government departments. A merchant who wants to do things legally and applies for a permit (vergunning) to operate on the street is often denied. However, because they applied for the permit, they are in the system, and authorities show up to remove or stop them.
Meanwhile, people operating on the street every day completely illegally remain untouched for the simple reason that “they never asked for a permit.” This creates a paradigm that punishes anyone trying to act through legal channels.
Fewer new laws, more enforcement
In conclusion, the message to political leadership was direct: stop trying to introduce new laws simply so every minister can claim they accomplished something during their 4-year term.
“If we stop for 4 long years, introduce no new laws, and focus precisely on enforcing what already exists, we will have a better Aruba,” declared CUA President Frans Ponson.