Sale for internal and external flights are starting to feel stronger from this Easter holiday, hand in hand with the measures adopted and from Tax Administration (SRI) and the Ministry of Tourism. The reductions in VAT for domestic flights that are valid these days are insignificant, while from June the reduction in the residence tax will have a greater impact on the price.

So these Easter holidays will be the first in which consumers will be able to apply the reduced VAT rate from 12% to 8% for every ticket purchased until this Sunday, April 9, regardless of the flight date. This is a savings option for those who plan to travel by domestic flight in the coming weeks.

For example, if it is a return ticket from Quito-Guayaquil, for a flight in May, it would cost 100 USD. With 4 tax points less, the discount would be $3. VAT is only applied to the net rate, which would otherwise be $70, as the rest is taxes. That is, the VAT normally charged at the net rate would be $8.40, and if reduced by 4 points, the tax charged would be $5.40.

The reduction of VAT on annual holidays for tourism activities and services already exists from January 31, 2022. However, the Resolution NAC-DGERCGC23-00000005 of SRI expands the benefits that existed on airline tickets. According to Francisco Briones, director of SRI, the reform is positive because previously only tickets that were bought to be used in that period were reduced to 8% VAT. Now any ticket purchased during that holiday will have a discount on any tourist flight.

In this year 2023, after this decision that came into force on February 27, there are two moments of the year when this reduced rate can be applied to tourist activities, including the purchase of airline tickets: until this April 9 Easter and from November 2 to 5

Values ​​of international airline tickets They will also fall, but from June 1 and due to another decision, this time by the Ministry of Tourism. In Ministerial Agreement 2023 004, Minister Niels Olsen changes the fee collection model Eco Delta (applies to flights from Ecuador abroad) and Ecuador Tourist Power rate (for flights from abroad to Ecuador). First reduction of a fixed value of USD 50 to 5% of the net rate of air transportation service, with a maximum cap of USD 50, for international operations conducted at Quito and Guayaquil airports. As for Ecuador’s tourism power rate, which was $10, it now drops to 5% of the net rate, up to a maximum cap of $10.

This benefit will be for airlines that fly regularly from the international airports of Quito and Guayaquil. However, passengers on charter flights will not be able to use this benefit, whose Eco Delta price will continue to be 60 dollars in accordance with current regulations.

In this regard, Olsen reported that from June 1, 2023, air tickets to and from Ecuador will be cheaper. He reminded that in 2016 a rate of $50 was imposed on all Ecuadorians traveling abroad. The idea was that the funds collected from this tax should be used to promote tourism. After three years (from 2016 to 2019), 70 million dollars were collected, but only 1.9 million dollars were invested in tourism promotion.

The minister gave examples of costs with the reduction of Eco Delta:

He also reminded that several decisions were made to improve air connectivity. For example, The foreign exchange departure tax (ISD) for airlines has been reduced. An open sky policy was applied; the country was promoted. And now there will be a reduction in tourism prices.

Ecuador’s decision to lower rates was well received by international tourism associations. Therefore, Air Transport Association of Latin America and the Caribbean expressed his gratitude to the Government of Ecuador and the Ministry of Tourism and Minister Niels Olsen for reducing the rates of Eco Delta and Ecuador Tourist Power, which since 2016 have been taxing airline tickets issued for travel from Ecuador abroad.

for his part, IATA (International Air Transport Association) congratulates Presidency of the Republic and called on other countries to follow the example of Ecuador.