PUNTA CANA. The National Association of Hotels and Tourism (Asonahores) asserts that the suggested tax reform by the government will negatively impact the economy, particularly the tourism sector. As such, they call for a comprehensive review and reconsideration of the proposal.
The Asonahores clarified that attracting foreign investments and establishing new hotels require the continuation of the current tax laws. “While we agree with the amendment and enhancement of the Law for the Promotion of Tourism Development (was stabbed), it should be done in a manner that ensures investments for novel projects and renovations, while assisting state revenue collection,” explained David Llibre, president of the institution.
“Regrettably, the current proposal may discourage hotel chains from investing in the Dominican Republic due to its relative non-competitiveness with neighboring countries, causing a downturn in our tourism industry” Llibre added.
In the words of Asonahores, to draw major global hotel chains to Punta Cana or to develop fresh tourist spots like Brigantine Point, breads among others, it is essential to retain the Confotur law. “Our goal with Confotur should be to optimize it and set elevated standards to be eligible for the law’s benefits. Focus should be on initiatives that spawn numerous jobs and are limited to projects with sustainability agendas and community development. However, elimination is not the answer,” Llibre emphasized. Book
According to the institution, tax revenue and foreign investments generated from tourism surpasses 12 times the sector’s tax expenditure which should ideally have been factored in during cost-benefit analysis of each incentive law.
“Our point is that, if uninterrupted growth of the sector is halted, which is likely to be the outcome of this reform, the government will ultimately see a decline in revenue collection. Job growth, commerce growth, foreign currency generation, and various other chain reactions will also stagnate; for instance, increase in purchase of bananas, eggs, fruits, vegetables and so on. In essence, we contribute more value to the government and the economy with the current system than by abolishing it.” said Llibre
Llibre reminded that the tourism sector bears responsibility for three out of every ten dollars as foreign currency into the Dominican economy. The hotel industry was able to make local purchases totalling up to 2 thousand 522 million dollarsin 2022 alone. This resulted in tax revenue which was way above 150 billion pesos, while creating over 700,000 direct and indirect jobs equating to 18% of the total jobs in the country.
During the launch, we shared a motivational message about the potential of the tourism sector and business opportunities, highlighting our willingness to collaborate closely with the government. Together we can do more!#ASONAHORES #DominicanTourism pic.twitter.com/SiYiedEH5C
— Asonahores (@AsonahoresRD) October 10, 2024
The Government
As per Raquel Peña at the event, the tourism sector plays a significant role in economic, employment and public revenue growth and accounts for 19% of the Dominican Republic’s gross domestic product. She assured continued government support for the sector.
“The impact of this contribution is not just monetary, but it also creates thousands of jobs and opportunities for Dominicans. These benefits have led to more than just economic income; they have paved the way toward collective prosperity. That’s why under President Luis Abinader’s distinct vision, we have brought in sustainable economic growth strategies with tourism as its core,” underscored Peña.
The vice president expressed confidence that such activities will help achieve the target of 14 million visitors by 2028.
As stated in the «The RD 2036 Meta Plan introduced by our government, the goal is to double the Real Gross Domestic Product of the Dominican Republic by that year. The tourism industry will play a vital part in this transformation, with ambitious targets that include reaching 14 million visitors in 2028, escalating average expenditure of international visitors, and a 33% rise in employment in the sector,” Raquel Peña asserted during the commencement of the Asonahores commercial exhibition.
Minister of Tourism, David Collado also made a note of the Government’s continued support for the tourist sector that has played a major role in its enormous growth.
“We have managed to get through every hardship… And if we were there supporting you during those challenging times, we promise to continue standing by you seeking solutions in all upcoming circumstances,” Collado remarked during the inaugural ceremony of the 36th edition.