Proposal to boost Dominican shopping tourism with tax refunds

Santo Domingo.- The Association of Hotels and Tourism of the Dominican Republic (Asonahores) is advocating for a new initiative aimed at promoting shopping tourism in the country. This proposal suggests implementing regulations that would enable tourists to receive a refund of the Value Added Tax (ITBIS) on industrialized goods and services purchased during their stay.

Aguie Lendor, the executive vice president of Asonahores, highlighted that the lack of tax incentives is a major obstacle hindering increased tourist spending in the Dominican Republic. Drawing parallels with Spain, where tourists can claim a tax refund on purchases made, Lendor emphasized the potential benefits for local businesses including hotels, restaurants, taxi services, and tour operators.

The suggested system mirrors Spain’s approach, allowing tourists to recover 18% of the ITBIS on purchases above a specified minimum expenditure threshold. This, according to Lendor, would make the Dominican Republic more appealing to high-spending tourists who not only patronize luxury stores but also contribute significantly to local services and cultural experiences.

Lendor argued that such a regulation would bolster the local economy without adversely affecting tax revenues, as tourists typically export purchased goods back to their home countries, akin to exporting products.

In 2023, the Dominican Republic welcomed approximately ten million visitors, with a substantial portion arriving by air and staying in local accommodations, thereby driving consumer spending. However, questions remain about the economic impact of cruise passengers.

Despite reaching significant tourism revenue totaling over US$9,751.0 million last year, slightly below government projections, Asonahores and the Ministry of Tourism (Mitur) remain optimistic about the potential to surpass the US$10,000 million mark with enhanced incentives for tourist spending.

The proposal aims to stimulate economic activity by aligning with global practices in tourism and consumer tax policies, potentially making the Dominican Republic a more competitive destination in the international tourism market.