Airbnb to pay taxes in Colombia, but hoteliers demand more

Contxto – The faceoff between marketplaces and the Colombian government continues! But this time around it’s not Uber who’s under scrutiny, but rather Airbnb. 

And unlike Uber, who’s been more on the losing side of this showdown, Airbnb has come to an agreement with Colombian authorities to pay its taxes and keep operating legally in the country. This announcement was made last Wednesday (26).

So, is it time for Airbnb to jump for joy? Not quite.

Remember how taxi drivers in Colombia were steamed at the unfair competition Uber brought about? Well, they’re not alone in that logic.

In the country’s hospitality sector, hotel owners are mumbling about Airbnb’s model and how it should come into compliance with the country’s regulations, just as traditional hotels do. 

Some arguments are valid, and others are worth an eye roll. 

Here we go again.

Related article: Uber jumps through legal loophole back into Colombia

Tax attack for Airbnb

When Iván Duque was in the race to become Colombia’s President, he promised the hospitality industry that platforms that host places for travelers to stay in would pay their fiscal dues.

Now, he’s making good on that promise and Airbnb is cooperating. 

The unicorn from San Francisco has agreed to pay the value-added tax. That naturally conveys that it’ll be registered under the country’s fiscal regime.

This is a crucial step to stay in the government’s good graces. And, also, it is actually very important that companies pay their taxes, regardless of their business model.

Some laud the arrangement.

But for others, namely Colombia’s Association of Hotels and Tourism (Cotelco), it’s not enough.

Human trafficking and bureaucracy blues

According to Cotelco, the country’s hospitality industry lost around US$24 million within the last three years because of Airbnb and other players who informally take in travelers.

As a result, this organization requests that Airbnb be more wary of the users who register a property on its platform. Specifically, that they be logged into the National Registry of Tourism, just as hotels are.

Cotelco argues that this will help reduce child exploitation. This is so because people under the registry must report to the government who they’re harboring under their roof and ensure minors are accompanied by a parent or legal guardian.

And it’s true that under Airbnb’s current model, properties can be used for human trafficking, or to commit other heinous crimes. An ugly reality that the unicorn has faced in light of news regarding sex trafficking on its hosted locations.

So much so that this week it expanded a pledge to fight human trafficking.

What is a bit of a stretch on Cotelco’s part is requesting that property owners fulfill other bureaucratic processes. One of which is ensuring that within an apartment complex, for example, other apartment owners authorize a person to lease their property on Airbnb.

Likewise, property owners must report the presence of a foreign tourist to the government, as hotels do. And it may be a way to reduce sex tourism, a plaguing problem in Latin America.

However, that doesn’t stop crummy non-compliant motels from being complicit in human trafficking too. 

Related articles: Tech and startups from Colombia!

-ML