President Daniel Noboa’s Executive Decree 304 cuts VAT during Carnival for hotels, restaurants, tourist transport, tours, and event services, aiming to boost occupancy, restaurant spending, and tour sales, especially in coastal and highland provinces.
Ecuadorian President Daniel Noboa has enacted Executive Decree 304 on 12 February 2026, temporarily lowering the Value Added Tax (VAT) rate from 15% to 8% during the Carnival holiday to encourage domestic tourism and support economic activity.
The reduced rate applies from 14 to 17 February 2026 to hostels, restaurants, cafes, tourist transport, tour packages and event services registered with the Ministry of Tourism. Eligible businesses must be listed in the official tourism registry and issue invoices during the holiday period. Airline tickets are included if the service is provided during Carnival, even if booked beforehand.
Authorities anticipate higher hotel occupancy, increased restaurant spending, and a boost in tour sales, especially in coastal and highland provinces where Carnival festivities are most prominent.
Earlier, Ecuador announced a temporary VAT reduction on tourism-related services, lowering the rate from 15% to 8% from 1 March to 4 March 2025.
