The recently enacted Law 57-23 dated October 6, 2023, creates a tax incentive regime for domestic and international commercial civil aviation, introducing amendments to Law No. 451-06 of Civil Aviation of the Dominican Republic.
The law has several main purposes which I would like to highlight: to boost the country’s competitiveness and facilitate the attraction of investment, with the establishment of new international routes to and from strategic markets of the Dominican Republic, seeking to strengthen the positioning of the country as a connection point for transportation, trade, and investment.
Our country has the accumulated experience of 22 years of application of Law 158-01 for the Promotion of Tourism Development, which has left ample benefits to the Dominican State, in attracting investment and generation of foreign exchange and jobs, among others, by promoting domestic and foreign investment in hotels, real estate projects, marinas and complementary tourism offers that have allowed the Dominican Republic to become the main tourist power in the Caribbean and Central America, and one of the main in Latin America.
This new Law 57-23 was modeled, in our opinion, after the successful experience mentioned above. Thus, the law establishes 3 payment exemptions, 2 of them for payment of income abroad, one on ITBIS on the sale of flights originating abroad with the country as a destination, for an exemption period of 15 years that will apply as of the enactment of the law; and a fourth exemption to the tax on assets declared to the DGII for 5 fiscal years as of the start-up of the company.
The law was necessary for the country to enjoy a legal framework that allows the development of national and foreign airlines with a permanent establishment in the country, under competitive conditions. If the law is not optimal as valid actors of the aviation sector believe, we must certainly say that the law is an excellent starting point, moreover “rational” because it grants the necessary fiscal incentives, “it does not give more and it does not give less”. The incentives established in Article 5 of the law are, from our point of view, the ones that were needed to be competitive for national air operators.
It is important to highlight Article 14 of the law which establishes that “the Civil Aviation Board (Jac) will rely on the technical teams of the Ministry of Tourism to determine the strategic routes and their implementation priority”.
From the point of view of ASONAHORES, this law and the previous article take enormous importance, since, it supposes once again, a public-private alliance for the strategic development of the civil aviation of the Dominican Republic as part of an integral planning of the tourism sector, that integrates the interests of the private sector and the public sector, for the continuous development and growth of the main economic sector of the country.
ASONAHORES applauds the efforts made by the airlines established in the Dominican Republic to consolidate and expand the outbound tourism markets to the Dominican Republic, preferably by establishing a direct air bridge with our country. A clear example is the routes recently opened by ARAJET to fly to Montreal, Canada, Buenos Aires, Argentina, and Santiago, Chile, as well as the additional efforts to establish new markets such as Guatemala City and Lima, Peru, which are precise examples of how to create opportunities not only for tourism but also for foreign trade and investment.
We are waiting for the implementing regulations of the law.
We also hope that Law 57-23 will be the turbine that generates a powerful development of civil aviation in the Dominican Republic.
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