The news that President Leonel Fernandez has already issued Decree 336-05 pegging a US$10 surcharge to arrivals has been received as a bucket of cold water by the tourism sector. The increase would be double the US$5 originally proposed by the government and rejected by the hotel groups in May. The Ministry of Tourism has proposed to use the money for tourism infrastructure projects.
Hoy newspaper reports that the increase in the charge is proof that the government seeks more revenues from the tourism sector, despite Finance Minister Vicente Bengoa having stated at a meeting with representatives of the National Hotel & Restaurant Association (Asonahores) that the sector would not be burdened with more taxes.
During the meeting, Bengoa had said that only Congress can create taxes and the agreement with the IMF does not stipulate the creation of new taxes, and much less that these be created administratively. The Hoy newspaper report does not specify the date of the decree establishes the charge will go into effect, although Tourism Minister Felix Jimenez, the main advocate of the charge, had announced it would start 1 August.
Association of Airlines (ALA) sources told Hoy newspaper that the government exercised delay tactics and had already made up its decision. ALA sources criticized that the decision to increase the cost of the tourist card comes at a time when the Department of Taxes (DGII) has just announced it will levy the ITBIS (VAT) on airport services rendered to airlines, which means a 16% increase in the cost of operation of Dominican airports, already among the most expensive in the Caribbean.
Asonahores reported last week that the Port Authority seeks to add US$5 to the port tax to tourists arriving on cruise ships.
Hoy newspaper explains today that the project presented by Tourism Minister Jimenez, and approved by President Fernandez, establishes that Asonahores will present to the government three names of engineering professionals to represent it instead of Asonahores naming its representative. Furthermore, the newspaper says that the decree ignores the interest of hoteliers in having more of a say in the use of the money. East Coast hoteliers had conditioned accepting the tax to the money be invested specifically in the region that generates the tax. The representatives of tourism in the Punta Cana-Bavaro area have complained that while the government has invested practically nothing of tax monies generated in the East in the region, it would now be even more unfair to tax them and that the money be invested in the north or in opening the new area of Pedernales. Tourism Minister Felix Jimenez is a strong advocate of opening up tourism in the Pedernales area.
When Tourism Minister Felix Jimenez first proposed the US$5 surcharge on airfares, the National Hotel & Restaurant Association spoke strongly against it on grounds that taxes and airport charges, and operational costs at local airports, are already at peak levels and local competitiveness would be lethally affected.