With the recent adoption of the Law on Economic Efficiency and Creation of New Jobs in the National Assembly, several ministries are starting to calculate the possible benefits that sectors of the economy could achieve, including tourism, attracting investment and others.

In the case of tourism, Minister Niels Olsen highlighted three articles that were approved by the ordinance. The first provides an exemption from income tax (IR) for up to seven years for investments of more than USD 100,000. Olsen indicated that at least 10% of investment projects must be in rural areas to reduce migration with tourism.

Exporters see a negative impact on company liquidity due to the retention granted by the emergency law

The second eliminates the 25% withholding tax on payments made by tourism businesses for the international promotion of Ecuador and commission payments to OTAs (online travel agencies).

While the third article applies a value added tax (VAT) of 0% for the accommodation of international tourists who contract it through a tour operator. “VAT that is not crossed out would remain a tax credit,” explained Olsen. He assured that with these three articles, tourism is getting closer to becoming state policy.

In a video posted on X (formerly Twitter), Olsen recalled that the tourism sector has been hit hard by the pandemic and insecurity. He pointed out that for two and a half years, he and his team at the Ministry of Tourism worked on accelerating the reactivation. Olsen is the only minister in the government of Guillermo Lass who was confirmed in office by President Daniel Noboa.

He said that the problems of insecurity and migration are solved by youth work, especially in rural areas, which is one of the strong points highlighted by the recently adopted Emergency Law on Economic Efficiency and Employment. He pointed out that tourism is the third economic branch that generates the most income in the country, after shrimp and bananas; and he pointed out that in order to become the first, they must have at least the same incentives offered by other countries, such as Costa Rica and the Dominican Republic, whose main income and job creation comes from tourism.

The emergency law on economic efficiency and the creation of new jobs is approved by a large majority

Meanwhile, the President of the Republic, Daniel Noboa, also reacted from Carondelet to the approval of the law. “We are very happy that we finally managed to come to an agreement as a country, that hope was finally able to prevail strongly. With great strength, but without hatred, we managed to pass a law that will benefit young people, that will favor the employment of young people, that will help bring in foreign investments; At the same time, it will give the state a flow that it desperately needs at this moment, because we have been embezzled as a state for the last two years…”, said the president.

For his part, the Minister of Public Works, Roberto Luque, pointed out that the law that the Parliament just adopted has a comprehensive legal framework that provides long-term security to investors.