Aruba is planning to amend its tax system and raise taxes. Economist Friedrich Schneider is providing the government with expert advice.
At the request of the Aruban government, Friedrich Schneider (Professor emeritus of economics at the JKU) is currently providing consulting services in support of modernizing the country's outdated tax system. As an internationally recognized researcher, Prof. Schneider has also conducted studies for the International Monetary Fund (IMF); for example, together with an IMF employee, he compiled an international shadow economy study of 156 countries.
Aruba applies a sales tax system of a 6% tax rate on all of its products and services. The Netherlands has been urging Aruba to introduce an input tax deduction to generate more revenue by means of higher tax rates. The idea is to offset losses that island, which specializes in tourism, incurred as a result of the pandemic. Although Aruba is autonomous, it is still a part of the Kingdom of the Netherlands. In 2017, the EU placed Aruba on its list of tax havens, a move that was reversed in 2019. But whether or not the country can stick to the January 1, 2023, reform deadline remains to be seen. Prof. Schneider remarked: "Things like this tend to be less straightforward."