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Articles

Illegal tourism businesses in Curacao are rampant; CASHA members sound the alarm.

1/19/2022

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Jan. 18, 2022 - WILLEMSTAD 
One of the Curacao Apartment Small Hotel Association’s (CASHA) important policies is a Level Playing Field: a level playing field for all participants. Its members think this is one of the most important issues.
In recent years, various meetings have been held with the authorities involved, but unfortunately without actual results. The subject is even more topical than before because on the one hand Curacao needs money to get out of the financial crisis and on the other hand people start offering illegal services every day, so that the much-needed money does find its way to the treasury but disappears in the bags of the unregistered landlords.
The government is sleeping. They don't need liquidity support, the money is just out there!
CASHA members meet all requirements regarding permits, registration Chamber of Commerce and Crib (tax number), hygiene, safety, comfort and personal attention.
Besides those who rent out neatly according to the rules, there is a huge group of landlords who flout the rules and rent out their 2nd house, outbuilding, shed to tourists without contributing to the economy.
According to the brokers, more than ever 2nd houses are sold to foreigners with the intention of renting out, they often do not bother to register, also because they are not informed about the rights and obligations as a landlord.
The house is rented out from abroad, the income comes into a foreign account and no one says anything. 
At well-known booking sites such as Airbnb, Booking.com, anyone can offer their accommodation for rent, there is no control over whether tax is actually paid.
This does not motivate the honest landlord.
Property management is doing very well, the management company is usually registered but the owners of the houses are not. The management company often pays taxes, but the owners of the properties do not. Sometimes a management company manages more than a hundred houses. Neighborhoods are full of villas for rent both on Banda Abou and Banda Riba and in the city, you stumble across the range of accommodations for rent.
There is an explosion of accommodation on Facebook in the illegal sphere, many providers of accommodation rent out without paying the legally required sales tax and without reporting the income.
The "illegal" landlord feels untouchable because in the last 15 years there has been no visible action to address this massive problem. The government does not monitor and hardly enforces.
At the SBAB they do not know where to start and they check business owners who are properly registered instead of tackling these abuses. One of the SBAB employees who was commissioned to investigate the illegal rental came to CASHA to ask about the occupancy figures of the members, to the reaction of one of the board members of CASHA: “you are not going to inspect the people that meet all the requirements?” The answer was: "We have to start somewhere".
What has happened to the National Decree Level Playing Field, for which a task force was set up in May 2018 with the intention of creating as much support as possible for a level playing field, in which the various sectors adhere to the unambiguous rules and contribute jointly?
Then came Turi, the obligation to register your tourist accommodation. Only a few have complied with this request. Mainly because of the lack of communication.
Already in 2017, at the request of the Ministry of Economy (MEO) and the Ministry of Finance, a proposal was received from Airbnb, in which Airbnb wants to collect tax directly from the landlord.
Now there is a bill on the table that is very secretive and which CASHA has still not had access to. According to our contact person at MEO, the bill is on the priority list of the Minister of Economic Affairs, Mr. Cijntje.
Until now, only a small number of people have had access to this new legislation, which is very important for many CASHA members, business owners in the tourism sector.
Because why would you work hard and pay taxes if your neighbor doesn't?
In addition to accommodation rentals, which are the easiest to control by the government, illegal activities can be found in all aspects of our economy. For example, diving schools are troubled by illegal colleagues, the so-called "cowboys" who do not meet the requirements set in the field of safety, permits and registration. The illegality is rampant. Every day we see divers and people with snorkeling trips paying cash on the street.
It is so frustrating that some registered business owners are thinking of adopting the same system.
Following an investigation, the diving schools have had a report made in which it appears that the participating diving schools are good for a contribution of 50 million to the economy. During this investigation, they found about 98 diving schools offering their services through social media, only 30 were found to be legal.
At the moment there is no more car available, illegal rental is going well, these cars are often offered with only third-party insurance. Suitable for private use but not for rental.
Colleagues in the tours offer services in an uninsured car, we hold our breath.
The problem of illegality is not only about money but also about safety. What if an apartment burns out that was not insured for rental? What if a tourist causes a serious car accident and the insurance refuses to pay out because the car was not allowed to be rented? What if a diver drowns because the diving school did not follow the rules? What if...
Last Sunday we were able to see what happens when boat charters don't follow the rules. CASHA members who provide boat charters guarantee the safety of crew and passengers. It would be a shame if boat charters that do have the necessary paperwork, make their payments properly and meet all the requirements, risk being hit by government sanctions because there are a few "cowboys" who don’t follow the rules.
One of our members recently said, "it's been more than enough".
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    Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.

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