NewsWhore
11-17-2006, 03:30 PM
The National Hotel & Restaurant Association (Asonahores) has reacted to the announcement of a new 5% tax on hotel rooms by describing it as "absurd and irrational", saying that it will turn the Dominican hotel industry into the most highly-taxed in the Caribbean region, as reported in Listin Diario. Finance Minister Vicente Bengoa has argued that the tax only represents US$30 million for the tourism sector, which generates revenues of US$3.7 billion a year.
Asonahores president Luis Lopez said that the minister forgets that the DR has to compete with other destinations in the Caribbean and the rest of the world, and that tourism is an export activity that the government should be stimulating instead of penalizing. He called the proposed fiscal reform a "severe blow" to the industry, adding that it will significantly increase costs. He said that in 1998, that tax was replaced with an agreement to levy ITBIS (VAT) on all-inclusive tour packages.
"This is bad news for the tourism sector and for local and foreign investment," observed the hotelier. He mentioned that the sector would also be affected by the increased tax on alcoholic beverages, as this is a major input for the sector. He went on to say that the proposed 10% increase on insurance policies would also affect the sector, because of the large investment in property as a major component of the hotel sector. Moreover, he said that increasing the tax on luxury dwellings (those costing over RD$2.5 million) would damage the promotion of the DR as a second home destination. "The tax burden that has been increasing in recent years has turned the Dominican investor into a kind of endangered species and will also end up scaring away foreign investment", says Asonahores. They warned that the tax increase would reduce the sector's competitiveness.
More... (http://www.dr1.com/index.html#2)
Asonahores president Luis Lopez said that the minister forgets that the DR has to compete with other destinations in the Caribbean and the rest of the world, and that tourism is an export activity that the government should be stimulating instead of penalizing. He called the proposed fiscal reform a "severe blow" to the industry, adding that it will significantly increase costs. He said that in 1998, that tax was replaced with an agreement to levy ITBIS (VAT) on all-inclusive tour packages.
"This is bad news for the tourism sector and for local and foreign investment," observed the hotelier. He mentioned that the sector would also be affected by the increased tax on alcoholic beverages, as this is a major input for the sector. He went on to say that the proposed 10% increase on insurance policies would also affect the sector, because of the large investment in property as a major component of the hotel sector. Moreover, he said that increasing the tax on luxury dwellings (those costing over RD$2.5 million) would damage the promotion of the DR as a second home destination. "The tax burden that has been increasing in recent years has turned the Dominican investor into a kind of endangered species and will also end up scaring away foreign investment", says Asonahores. They warned that the tax increase would reduce the sector's competitiveness.
More... (http://www.dr1.com/index.html#2)