Establishments authorized to reduce VAT from 12% to 8% went from 12,234 to 23,173 since the 2022 carnival

Restaurants, hotels, hostels, ice cream parlors, travel agencies, airlines and among other businesses, which total 23,173 establishments nationwide, part of the tourism sector, are those that are authorized to apply the reduction of value added tax (VAT) from 12 to 8% on your products or services during the carnival holiday, between Saturday February 18 and Tuesday February 21, 2023.

In this way, the number of authorized establishments almost doubled in one year, since in the cadastre for the 2022 carnival holiday the registered premises were 12,234.

Lower VAT to 8%, how long will it be in effect and to which sectors does it apply?

Here are all registered establishments: https://drive.google.com/drive/folders/1UAqPrlqq00h_FA3ZJ1eXZBnwR3ow3Lr7

This increase is classified as positive by Holbach Muñetón, president of the National Federation of Provincial Chambers of Tourism of Ecuador (Fenecaptur), who nevertheless has observations and suggestions.

“There are 23,000 registered establishments, it’s good, no one says no, but I think a much more powerful strategy needs to be made because what we need is to sell,” stressed the leader, who acknowledged that any VAT reduction is interesting, but suggested that it would give better results if the reduction from 12% to 8% were maintained for a longer period of time, such as a month or two months; and further lower the tax to 4% or even 1%.

“Something that is more powerful because what the tourism sector needs is to sell more, give more confidence, that people travel more”, reiterated Muñetón, who revealed that the loans for the sector offered by public banks, through BanEcuador, are only for businesses with sales of up to $100,000 a year, which leaves medium and large players out of financial aid of the sector.

Regarding the expectations of the holiday, the head of Fenacaptur projected that the tourism sector will generate good income, by confirming that tourist destinations such as Manta (Manabí), sites in the province of Azuay, among others, they already have full reserves.

Raúl García, vice president of Fenacaptur, estimated that sales in the tourism sector could reach more than $60 million during the four days of the holiday.

Tourism sector expects $60 million to move for the 4-day carnival holiday

Meanwhile, the updated tourism cadastre was released by the Ministry of Tourism (Mintur) through the publication that had its last update last week before being posted on the website of the State portfolio.

This, after verifying -in coordination with the Internal Revenue Service (SRI)- the information of the tourist services that will benefit from the reduction from 12% to 8% decreed by President Guillermo Lasso, by effect of the Development Law Economic and Fiscal Sustainability, which introduced the power of the agent to reduce the VAT rate for the provision of all services defined as tourist activities, up to a maximum of twelve days a year during holidays or weekends.

While, The VAT reduction from 12% to 8% will also be carried out for Easter holidays: Friday 7, Saturday 8 and Sunday 9 April, All Souls Day and Cuenca Independence: Thursday 2, Friday 3, Saturday 4 and Sunday 5 of November. (YO)