The Dominican Republic’s Hotel and Tourism Association (Asonahores) reiterated yesterday that it is imperative for the sector to maintain the tax benefits and regime that have propelled its growth over the years in the country.
The President of the hotel association, Mr. David Llibre, gave this warning yesterday when the government tendered the Fiscal Modernization project.
This proposal suggests reviewing the Confotur Law, existing since 2021, which laid out a special incentives system for the tourism industry.
Llibre ranks the government’s proposed tax reform as harmful to the economy, specifically for tourism, urging it to be reassessed and amended.
In his opinion, the present tax regime is crucial to lure foreign investment and establish new hotels.
Although David Llibre approves of updating and enhancing the Confotur, it should be in a manner that ensures investment for new ventures and renovations and assists the State in accruing more revenue.
Regrettably, the current proposal would impede the appeal of the Dominican Republic to hotel chains due to non-competitiveness compared to regional countries, resulting in a tourism decline, he added.
To draw major international hotel chains to the Punta Cana region, or to create new tourist zones like Punta Bergantín and Miches, a law like the Confotur is indispensable, Asonajores underlined.
Asonahores’s Proposal
Asonahores proposed to the government to amend and better the Confotur Law, instead of abolishing it.
The association stressed that in the event of no exemptions, there would be no further job market expansion, no more commerce growth, no additional foreign currency generation and no growth in the production chain.
David Llibre assured that the hotel industry contributes more to the government and the economy with the current structure than by eliminating it.
He pointed out that tourism is responsible for three out of every ten dollars in foreign currency produced by the Dominican economy.
In 2022 alone, the hotel sector spent $2,522 million in local purchases, generating a tax revenue collection of more than 150 billion pesos. It also created over 700,000 direct and indirect jobs, equivalent to 18% of the country’s total jobs.