The National Hotel & Restaurant Association does not support the creation of a new tax on airfares to the Dominican Republic. In response to Tourism Minister Felix Jimenez’ announcement while in Spain of a new US$5 surcharge on airfares in order to fund infrastructure works in Dominican tourism destinations, Asonahores issued a written note withholding its backing of the measure, even though Jimenez had said Asonahores favored such a move.
The association said that while the initiative is praiseworthy, the tourism sector cannot withstand any more taxes. Their position is that the government, before creating a new tax, should wait to ascertain the impact of the adjustments that have been made in the economy, including the imbalance created by the accelerated appreciation of the peso to the US dollar. In three months, the Dominican peso’s value has risen from RD$47 to US$1 to RD$30 to US$1. This phenomenon occurred at the same time that the ITBIS tax was increased from 12 to 16%.
Asonahores says that hotels are now receiving fewer pesos while dealing with the increases in taxes, labor and other costs, such as energy and food and beverages, whose prices do not reflect any currency appreciation.
“In this scenario in which costs continue at high levels, the appreciation of the peso becomes a non-declared and selective tax on generators of hard currency, who are also the principal productive entities of the nation,” states the release.
Asonahores believes this situation is unmanageable for the short term, especially considering the increased taxes, which will only translate into economic losses and a weaker ability to compete.
They furthermore point out that hotel rooms are sold several months in advance, reason for which an increased charge of US$5 to every tourist will mean less revenues allocated to the hotels.
The tax might not stand a chance in Congress. The president of the Social Christian Reformist Party, Federico Antun Battle, told El Caribe that his party would oppose the new surcharge on airfare recently announced by Tourism Minister Felix Jimenez. “The position of the party is not to approve any more taxes. It does not make sense. What the country needs is to instill new dynamism to the economy so that it can grow. We cannot establish more taxes and deepen the recession the economy is suffering,” he stated.