The proposed government tax reform will harm the economy, chiefly the tourism sector, warns the Association of Hotels and Tourism (ASONAHORES).
Institution president, David Llibre, noted that the tourism industry brings in 30% of the Dominican Republic’s foreign currency and provided more than 700,000 jobs in 2022, equating to 18% of total employment in the country.
The current tax system must persist for attracting foreign investments and facilitating the establishment of new hotels, Llibre emphasized. He does support amending the Law for the Promotion of Tourism Development (CONFOTUR), given that it ensures new projects’ funding and contributes to tax revenue growth.
The proposed reform, as it stands, would discourage hotel chains from investing in the Dominican Republic, causing a decline in tourism, the businessman further warned.
ASONAHORES emphasizes that a law equivalent to CONFOTUR is indispensable for attracting global hotel chains to the Punta Cana region or developing other tourist areas like Punta Bergantín and Miches. Llibre argues for honing CONFOTUR’s standards, ventilating it towards room creation that generates numerous jobs, and awarding benefits to sustainable projects.
The organization believes that an evaluation should account for how tourism generates 12 times the tax expenditure in tax revenue and foreign investment for each incentive law.
If the sector doesn’t grow, and this reform hinders that, the government’s long-term revenue from the sector will decrease, warned Llibre. Though there would be no exemptions, job growth, commercial growth, or foreign exchange generation wouldn’t increase. The current structure contributes more to government and economy than its eradication would, Llibre emphasizes.
