Today’s story on a memorandum of understanding signed with Airbnb to promote the island reveals that 6,200 visitors made use of the company last year. There can thus be little doubt about the growing local impact of so-called home-sharing.
But government’s announcement lacked details and any mention of the obvious elephant in the room, namely taxes. This will interest particularly the more traditional hospitality industry faced with a hefty fiscal and social burden.
That aspect was being worked on, Finance Minister Perry Geerlings told Parliament earlier this year. It’s not clear what has been achieved so far, but there are always considerations, and quite a few destinations, cities, towns and homeowners’ associations elsewhere have either restricted or even forbidden Airbnb.
This is done to serve business, economic or other interests, but also to prevent the kind of nuisance short-term holiday rental can bring. The running joke in Cupecoy is that medical students at American University of the Caribbean (AUC) – of all people – complain about the “noisy tourists.”
Nevertheless, certainly under the current circumstances with a – still – relatively low room inventory, Airbnb and other, similar services enable more guests to come during peak periods with high occupancy rates. Besides, accommodations, including vacation homes, have been rented out to visitors for many years, often under the radar.
Because the owners are often non-residents who don’t file taxes here, a botched effort was made to introduce a so-called condo tax with assessments based on perceived rental income that could often not be properly substantiated. It must be said, also many inhabitants don’t report rental earnings.
While Airbnb charges the customer a usage tax in jurisdictions where it made a deal to that effect, this has in principle nothing to do with the taxable income of the host. However, especially because collecting the latter has proven difficult at best, such an arrangement would provide the national treasury with at least a share of the revenues.
