SANTO DOMINGO- The Dominican Association of Real Estate Tourism (ADETI) believes that the total elimination of incentives generated through Law 158-01 on Tourism Development Promotion is inappropriate, as these incentives have facilitated substantial investments that have contributed to the country's development.
The Fiscal Modernization Bill presented to the country last week by the government, which is currently being processed in the National Congress, eliminates several articles related to incentives, which motivated the creation of this piece of legislation, one of the pillars on which real estate investments in the Dominican Republic have been based in recent years.
Eduardo Read, president of ADETI, expressed his support for dialogue between the various sectors to review the aspects that must be exhausted in the law to avoid distortions or putting at risk the levels of competitiveness of the region and avoid the diversion of investments to other markets.
“At ADETI, we believe that the total elimination is inappropriate, since thanks to these incentives the tourism and real estate tourism sectors have been able to make substantial investments, generating jobs, foreign exchange, and contributing to an overall economic impact that benefits other productive sectors and the inhabitants of the area,” the businessman told El Inmobiliario.
Eduardo Read, president of ADETI. (External source).
He pointed out that eliminating this incentive would have a very negative impact, hindering the sector's growth and development. "That's why we are promoting dialogue and consensus among the various stakeholders to review the aspects and requirements that must be met before Confotur to avoid distortions, without jeopardizing the region's competitiveness or diverting investment to other countries.".
Regarding the Property Property Tax (IPI), he considered that its current exemption model, under the Confotur Law, represents a benefit for buyers for a period of 15 years, at the end of which it is paid, leaving the homes within the real estate tourist destinations as those of higher value and therefore, higher tax for said tax.
“Modifying it would lose the interest of many buyers – investors, greatly affecting the development of the sector,” Read said.
Taxes on digital platforms
Eduardo Read stated that ADETI supports both the regulation of digital lodging platforms and the collection of taxes, based on experiences in other countries. "Last year alone, revenues generated in the country were estimated at US$917 million, according to information obtained from AirDNA," he concluded.
Builders warn housing is in danger
A group of associations linked to the Dominican construction sector considered yesterday, Monday, that the possible entry into force of the Fiscal Modernization Bill would reduce the sale of homes in the Dominican Republic by around 56%.
In a press conference, the leaders of the groups explained that the tax reform submitted by the government to the National Congress would generate a reduction of approximately 77 billion pesos in investment in new projects, causing negative impacts on the Gross Domestic Product (GDP) and the reduction of more than 115,000 jobs.
“All these factors, together with the addition of taxes on short-term rentals, will cause a collapse in housing demand, decreasing sales by approximately 56%, which would motivate a reduction of around 77 billion pesos in investment in new projects, causing negative impacts on the Gross Domestic Product (GDP) and the reduction of more than 115,000 jobs,” the business leaders considered.
