On 1 April 2024, Ecuador’s National Assembly declared the approval of the law aimed at enhancing tourism activities and promoting employment. The provisions of the law encompass the following initiatives:
- Investment Incentives: Local taxes will be waived for projects involving investment or reinvestment in tourism. This move aims to attract new businesses and encourage existing ones to expand, potentially creating new jobs in the sector. Additionally, municipalities and the government have the flexibility to offer further incentives.
- Support for Tourism Businesses: Businesses registered with the National Tourism Registry will benefit from a 50% deduction on security expenses. This financial aid can help them improve safety standards and invest in tourism infrastructure.
- Tax Relief for Airlines: Foreign Exchange Exit Taxes for airlines, both domestic and international, will be slashed to 0%. This will make it cheaper for airlines to operate in Ecuador, potentially leading to lower fares and increased flight options.
- Tax Debt Relief: Businesses struggling with unpaid taxes can avail of payment facilities stretching up to 24 months for obligations up to the 2023 tax year. Additionally, there’s an option for leniency on overdue payments to the Social Security Institute, with the possibility of waiving interest charges.
- Tax Breaks for Artists: Artists involved in tourism services will be exempt from the 25% withholding tax, providing them with a financial boost.
This new law signifies a strong commitment from the Ecuadorian government to boost the tourism industry, which is a crucial source of income for the country. These measures are expected to make Ecuador a more attractive destination for tourists and encourage investment in the sector, ultimately leading to job growth and economic development.
