Ecuador's National Assembly approves Law to Strengthen Tourism Activities

25-03-24

In a session held on Thursday night, March 21, the National Assembly of Ecuador approved with a resounding 83 votes in favor the fifth draft of the Urgent Economic Law submitted by the Executive. 

This law, called Organic Law for the Strengthening of Tourism Activities and Employment Promotion, promises to open new doors for the Ecuadorian tourism sector and offer financial relief at a crucial time.

One of the highlights of this legislation is the provision for the Ministry of Tourism, in coordination with public and private institutions of the National Financial System, to facilitate loans with preferential rates and flexible terms for the tourism sector. This financial support is directed especially to establishments affected by various adverse circumstances, offering more favorable refinancing conditions for their existing operations.

In addition, the law contemplates measures to alleviate the tax obligations of tourism service providers, allowing payment facilities for debts with the Internal Revenue Service (SRI) and the Ecuadorian Social Security Institute (IESS). Likewise, it establishes the possibility of refinancing debts of the sector with public banks, prioritizing access to credit facilities by state financial entities.

In order to promote the country as a tourist destination, the "Fondo de Desarrollo Turístico del Ecuador" will be created, financed by the Ecodelta and Potencia Turística rates. This fund will support programs and projects to improve competitiveness and tourism development in the country.

In terms of air competitiveness, the law provides for a gradual reduction of the air fuel surcharge, which will benefit airlines operating in Ecuador and potentially lead to lower prices for travelers.

Community tourism will also receive a boost with promotion strategies and support from the Ministry of Tourism, while employability in the sector will be promoted through coordination with labor and higher education entities.

In addition, the general VAT rate will be temporarily reduced to 8% for 12 days a year to promote domestic tourism.

After its approval in the National Assembly, the law will return to the Executive for review, where it may be subject to total or partial objections, or it may be approved without changes.

The Minister of Tourism, Niels Olsen, concluded the session expressing his optimism: "With the Organic Law for the Strengthening of Tourism Activities and Promotion of Employment, a great opportunity is opened to support the development of the country, strengthening the productivity of tourism, which is the third source of non-oil income of the country".