SANTO DOMINGO.- In the proposed Fiscal Modernization Law presented yesterday by the Government and which will be taken to the National Congress this Tuesday, the incentive scheme for the tourism sector was eliminated.
Jochy Vicente, Minister of Finance, during the presentation at LA Semanal with the press, stated that incentive laws are useful in certain circumstances, but that they cannot be eternal, citing that the Confotur law, No. 158-01, on promoting tourism development for low-income areas and new destinations in provinces and localities with great potential, dates back to 2001.
"The vast majority of these laws have been in place for decades," the minister said, citing as examples the laws on tourism, film, textiles, border development, and industrial competitiveness and innovation.
He said that "it is extremely difficult to justify the continuation of a law for a particular sector for periods longer than ten or fifteen years," while these sectors are already registering levels of profit from their operations that make the continuation of these incentives questionable.
The Government during the presentation of the project. (External source).
The official announced, in that regard, the elimination of preferential tax treatment for the tourism sector, film, industry, the textile chain, those related to trusts and those related to the patronage law.
What President Abinader said
President Luis Abinader assured on the stage of LA Semanal that the boom in the tourism sector will not be stopped by the tax reform, when asked about it.
"We believe that the tourism sector, thanks to the development of Dominican and foreign hoteliers and investors, has a significant level of development that is being sustained as it is," the president stated.
He noted that the development of this sector has been key to the country's economic growth.
He also stressed that tourism has reached a level of developmentthatis so important that it must be sustained and protected.
Abinader said that the sustained growth of the tourism sector is proof of the success of the incentive policies implemented over the years.
Estimated revenue
After presenting the project, the Government estimates that the total revenue would be RD 122,486.6million,for an estimated % of GDP of 1.5%.
In breakdown, Corporate Income Tax (ISR) would amount to RD$22,195.1 million, representing 0.3%. ISR for individualswould be RD$5,285.0 million, representing 0.1%.
Property taxes, RD 6,773.3, for 0.1%. Value added taxes, RD 75,230.7, for 0.9%, and selective consumption taxes, RD 13,002.5, for 0.2%.
