It was good to read that government has been working on a tax arrangement with Airbnb (see related story), despite this probably taking way too long for the taste of many. Finance Minister Ardwell Irion told Parliament the process had resumed when he took office, while Airbnb reported being in a restructuring process that also contributed to the delay.
As vaccination against COVID-19 ramps up worldwide, travel is bound to recover and no matter how you look at it Airbnb but also others like home-away-from-home have become major players in the worldwide hospitality industry. This is somewhat to the detriment of traditional resorts, although several now also do business with these kinds of services.
Realistically the trend appears unstoppable and – as the saying goes – if you cannot beat them, join them. Trying to go after property owners who do not declare such short-term rental income is practically a “mission impossible” and when it regards vacation homes of non-residents this becomes even more difficult, as botched efforts to introduce a so-called “condo tax” in the recent past showed.
It simply makes sense to at least get some guaranteed revenue via the booking agency. The intention is certainly not to discourage tourism, so the rates need to be reasonable and there are plenty similar agreements of other destinations to compare with.
Nevertheless, the minister’s concern about lack of staff at the Tax Office hampering optimal control on fiscal non-compliance is justified. Sharing the burden fairly with the necessary checks and balances remains important and the same can be said about ensuring a level playing field in the local business community.
