SANTO DOMINGO– “Unfortunately, the proposal as it is currently presented will cause hotel chains to move away from the Dominican Republic due to a lack of competitiveness compared to other countries in the region, and that will cause our tourism to decline,” declared David Llibre, president of the National Association of Hotels and Tourism (Asonahores), this Tuesday.
Referring to the proposed Tax Modernization Law presented yesterday by the Government, the representative of the hotel owners considered that the tax reform proposed by the government will have a negative effect on the economy, with respect to tourism, and therefore requests that it be studied and reconsidered.
He explained that attracting foreign investment and creating new hotels requires a tax system like the current one. “We agree with modifying and improving the Law for the Promotion of Tourism Development (Confotur), but in a way that guarantees investment in new projects and renovations, and helps the State collect more and better revenue,” stated David Llibre.
David Llibre. (External source).
The hotel association pointed out that attracting major international hotel chains to the Punta Cana area, or developing new tourist areas such as Punta Bergantín, Miches, and others, is impossible without a law like Confotur.
“What needs to be done with Confotur is to improve it, to set higher standards in order to access the benefits of the law, to focus on rooms that generate many jobs, to only grant it to projects with sustainability plans and that make their communities develop; but never eliminate it,” Llibre stressed.
The institution believes that if a cost-benefit analysis was done regarding each incentive law, it should have been taken into account that tourism generates 12 times the sector's tax expenditure in tax revenue and foreign investment.
“What we mean is that if the sector doesn't continue to grow—and with a reform like this, it definitely won't—the government will ultimately end up collecting less money. It's true, there won't be any exemptions, but there won't be any more job creation, any more trade growth, any more foreign exchange earnings, and no more growth in production chains, such as increased purchases of bananas, eggs, fruit, rice, vegetables, and many other things. In short, we contribute more to the government and the economy with the current structure than we would by eliminating it,” Llibre emphasized
The businessman noted that tourism is responsible for 3 out of every 10 dollars in foreign exchange generated by the Dominican economy; that in 2022 alone, the hotel sector made a total of 2.522 billion dollars in local purchases, generating tax revenue exceeding 150 billion pesos; and creating more than 700,000 direct and indirect jobs, equivalent to 18% of the country's total employment
