The Recommendation from Asonahores: Reconsider Incentives, Don’t Remove; Striking an Optimistic Note on the Government’s Willingness to Communicate
In Punta Cana, tax-based incentives have proven instrumental in developing tourism hotspots across various regions of the nation, initiating economic prosperity in areas that might have been economically dormant. This is a key point made by the Dominican Republic’s Hotel and Tourism Association, Asonahores.
David Llibre, the President of Asonahores, emphasized, “The continuation of dialogue with the sector regarding tax reform concerns is a significant priority for Asonahores. The Vice President’s recent announcement indicating the government’s commitment not to stifle the tourism industry is a good sign.”
He elaborated that tax incentives aim to kickstart the economy by creating positive externalities like job opportunities, infrastructure development, expertise, reducing capital investment costs and addressing market failures.
Llibre stated, “After the initiation of CONFOTUR, there’s been a significant increase in tourism accommodation. The numbers have gone up from 54,034 in 1996 to 87,723 in 2023, showing a 62% growth rate, diversifying the country’s tourism offerings and boosting economic growth in different regions.”
Tourism has a substantial influence on the Dominican economy, extending its effects beyond job creation, to generating income and contributing to the production chain, he added.
He also put forth that such incentives can address some of the limiting factors affecting the competitiveness of the Dominican Republic such as energy expenses, labor costs, airfare taxes and fees, foreign payment withholdings (implicit costs), levels of education, health, security, and infrastructure deficits.
“Investment incentives in tourism have been vital in driving foreign investment within the Dominican Republic’s tourism industry. Other countries the DR competes with also provide similar schemes to attract investment,” mentioned Llibre.
Since 2019, Asonahores has stated, the Dominican Republic has seen the highest growth in the area in terms of tourist arrivals. However, this increase needs to be mirrored by an increase in accommodations, necessitating a tax agreement that permits us to compete on level terms with other destinations in the region.
During a private press meeting where he brought up key factors affecting tourism incentives, Llibre shared valuable insights. Please find below a selection of the key points illustrated.