Rainieri: “Political favoritism has led to misuse of the Tourism Law”
Santo Domingo.- After the government withdrew its proposed tax reform, tourism entrepreneur Frank Rainieri emphasized the need for periodic review of all laws, clarifying that the Dominican Republic’s Tourism Law is aimed at enhancing competitiveness, not providing incentives. He believes this misunderstanding exists both within the government and the private sector. Rainieri points to Mexico, a key competitor, which halted its incentive law in 2019 but maintains only a 16% value-added tax (VAT) on essential tourism-related items. In contrast, Dominican businesses pay 18% ITBIS, a 20% ad valorem tax, and additional taxes on items like televisions, reaching a 56% tax burden.
Rainieri questions the ability of Dominican tourism businesses to compete under these tax pressures, highlighting that Mexico’s lower VAT offers a substantial advantage. He argues that the Dominican Republic must decide if it truly supports tourism, likening it to the export-oriented free trade zones. Rainieri insists the Tourism Law should be seen as a means of fostering competitiveness against 200 other countries rather than as a direct incentive.
While he acknowledges instances of abuse in applying the law, Rainieri attributes this to “politicians giving favors to friends” and stresses his opposition to such practices. Despite the flaws, he advocates for improvements within the legislation to better serve the tourism sector’s competitive needs.
The biggest burden is the amount of red tape.
Just to repair a wall by the water you need 8 permits in diferent government agency…it takes between 3 and 6 months each…..
1. Ayuntamiento
2.Turismo
3.Obra Publica
4.Muelles
5.Puerto
6.Armada
7.Medio Ambiente
8.Autoridad Vial
Otras Agencias e individuos pasan para querer intervenir
Other Individuals and agencies stop to intervene.
The refusal of just one of these agencies can shoot a project down. They expect reimbursement above and beyond regular fees as favors to rubber stamp permits. Investors have to have deep pockets.
A lower vat rate of below 10% for the tourism industry with a structure providing a calculation re rooms available close to airports with those airports used for the benifit of those areas
Eg el Carey receives only 150,000 passagers with the capitabiliity of 1.5 million passengers.
The infrastructure is there use it for the benifit of the entire country