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ASONAHORES, the Dominican Republic’s Hotel and Tourism Association, revealed at the recently concluded 36th edition of Expocomercial that of all the government’s tax revenues, at least 10 out of every RD$100 are contributed by the tourism sector. Moreover, in 2022, tax revenue generated by tourism exceeded RD$155 billion.
The largest business platform between suppliers and companies in the tourism industry, the XXXVI Commercial Exposition, took place last week at the BlueMall Puntacana facilities. Vice President of the Republic, Raquel Peña and the Minister of Tourism, David Collado, along with the ASONAHORES business community, inaugurated the event. At this setting, David Llibre, the president of ASONAHORES, expressed that for every peso tax exempted by the State on tourism, it returns 12 pesos in the productive chain’s dynamism. This process interconnects with other sectors of the economy, making purchases of goods and services amount to 139 billion pesos.
“The ITBIS is paid in all purchases made by the tourism industry for registered goods and services. So, we call for improving the current fiscal structure that aids the tourism sector, not eliminating it, to keep attracting investments that allow industry growth and continue generating contributions to the Treasury,” stated Llibre.
Similarly, he revealed that the Dominican tourism industry attracts significant foreign direct investment, contributing around US$3 for every US$10 generated in foreign currencies by the Dominican economy. This contribution makes it a significant player in maintaining the exchange rate stability of the country.
Adding to this, he stated that for the arrival of two million visitors to increase in the country, a foreign investment of US$5,000 million is needed, and this is only possible with the current legislation.
“We believe the incentives provided by CONFOTUR should target projects that offer a minimum number of direct jobs per room, improves the working conditions of direct employees, advocate the use of renewable energy, have a plan for reusing water for irrigation, recovery of solid waste, long-term plant renewal investment, and a commitment to social responsibility within their community,” Llibre pointed out.
The president of Asonahores emphasized that tax incentives have been vital in developing tourist centers in different regions of the country, fostering economic growth in areas that might not otherwise be economically viable.
David Llibre stated, “From Asonahores’s viewpoint, maintaining dialogue with the sector on matters concerning the tax reform proposal is vital. In this regard, the vice president’s message yesterday stating that the “government would not impede tourism’s growth given its significance to the country, stands as a positive sign.”
He explained that the incentives aim to stimulate the economy through the generation of positive externalities such as jobs, infrastructure, know-how, reduce costs in capital investments, and counteract market failures that generate high costs or deficiencies in a sector.
“Since CONFOTUR’s onset, the number of tourist accommodations has grown from 54,034 in 1996 to 87,723 in 2023 indicating a 62% increase. This growth helps diversify the country’s tourism offer and drives economic growth in different regions,” Llibre said.
Llibre highlighted that tourism plays a vital role in the Dominican economy, its influence extending from employment, income generation to the productive chain.
Furthermore, these incentives aim to mitigate factors that reduce the Dominican Republic’s competitiveness, including energy costs, labor costs, taxes and fees on air tickets, international payment withholdings (implicit cost), education levels, health and security, and infrastructure drawbacks.
“Investment incentives for tourism have been critical in attracting foreign investment to the Dominican Republic’s tourism sector. Other countries that DR competes with also offer schemes to attract investments,” claimed Llibre.
Asonahores announced that since 2019, the Dominican Republic is the fastest-growing in the region in terms of tourist arrivals, but this increase needs to be reflected in the growth of rooms. For this, a fiscal agreement is needed to enable us to compete on equal terms with other regional destinations.
XXXVI Commercial Exhibition recognizes the productive chain of tourism
Aguie Lendor, Asonahores’s executive vice president, stated that the Commercial Exhibition’s new edition aims to promote the development of the productive chain and strengthen business relationships, encouraging sustainable growth in the tourism sector and benefiting all stakeholders in the tourism industry.
The Asonahores Commercial Exhibition gets support from organizations like the Ministry of Tourism, Punta Cana – Macao Energy Consortium, CEPM, Dominican Popular Bank, INTESOL CORPORATION, Banreservas, INDUBAN, Dominican course, Therrestra, Novotecnic Dominicana, BHD Bank, SGC, Services, Guarantee and Quality, Blue Planet, Banco López de Haro, Construction Company of the Country (CODELPA), Dominican Wood Importer (IMDOMACA), Sherwin-Williams Paints, Viega, Vertex, Aquasport, Reid & Company, Trucks, BM Cargo, NTD Ingredients, Oldach Trading, INTELCA, Induveca, Puntacana Group, Nestlé Dominicana, TCO Networks, Equimax, INFOTEP, Dominican IMCA, Bii Dominicana, Servex Dominicana, McCain Foods Limited, DMK Lawyers, QA Legal, and Michel Abreú Lawyers.