In Punta Cana, the Hotel and Tourism Association (ASONAHORES), has expressed concern over the government’s proposed tax reform. The association argues that such a reform may negatively impact the tourism sector and the economy at large and is calling for further examination and reconsideration.
ASONAHORES maintains that attracting foreign investment and building new hotels requires a favorable tax regime. David Llibre, President of ASONAHORES, supports enhancing the Law for the Promotion of Tourism Development (CONFOTUR), but insists it should be done in a way that ensures investments for new and existing projects, while aiding the state’s revenue collection.
Llibre further warns that the current proposal could push hotel chains out of the Dominican Republic due to decreased competitiveness when compared to other nations in the region. If this happens, the country’s tourism industry would decline, he noted.
The association reiterated the importance of a law like CONFOTUR in attracting international hotel chains to areas like Punta Cana, or developing new tourist destinations such as Punta Bergantín and Miches. Llibre emphasized that while CONFOTUR needs improvements, they should be aimed at creating more job opportunities, endorsing projects with sustainability plans, and boosting local communities. But it should never be abolished.
ASONAHORES points out that assuming a cost-benefit analysis was applied to each incentive law, account must be taken of the economic contribution of the tourism sector, which generates 12 times the sector’s tax spending in tax revenue and foreign investment.
Llibre warns that stunting growth in the sector, particularly with proposed reform like this, would result in decreased government revenue. Absence of further growth would lead to reduction in job creation, commerce, foreign exchange generation, and the productive chain.
Llibre recalls that tourism provides three in every ten dollars of foreign currency for the Dominican economy. In 2022 alone, the hotel industry contributed 2,522 million dollars in local purchases, generated more than 150 billion pesos in tax revenue, and created over 700,000 direct and indirect jobs, amounting to 18% of the country’s total employment.