The new Law 57-23 on the promotion of civil aviation in the Dominican Republic could have a great impact on the economy and commerce of the country, generating more than 50 thousand direct and indirect jobs in the next 5 years and representing a growth of the Gross Domestic Product (GDP) of almost 3%.
The information came to light in the panel on the impact that the referred law will have, organized by the Chamber of Commerce of Santo Domingo, in which participated the president of said institution, Lucile Houellemont; the director of the Dominican Institute of Civil Aviation (IDAC) Héctor Porcella; the president of Arajet, Víctor Pacheco; the former president of Asonahores, Enrique de Marchena; and the Deputy Director of Compliance Management of the General Directorate of Internal Taxes (DGII), Ricela Sprauss.
The speakers agreed that the new Law provides the country with a legal framework that allows it to have some criteria of competitiveness with respect to the international aviation industry so that national airlines can compete on equal terms and thus have a positive impact on Dominican economic growth.
The president of the Chamber of Commerce affirmed that the institution will support each of the initiatives that impact the growth of trade and connectivity with other countries of the continent in order to continue to facilitate doing business in the Dominican Republic.
Porcella assured that “Law 57-23 will turn the Dominican Republic into a continental air hub and one of the most attractive destinations for international investment with a transcendental impact on the generation of employment and wealth for the country”.
Meanwhile, Pacheco made a presentation in which he compared the fiscal legal framework in which the Dominican Republic is now compared to other countries in the region such as Panama, Colombia or Mexico and concluded that the new law is vital for there to be a successful commercial aviation in the country.
“We must applaud the initiative of the State because without this law it was impossible that a national airline could be created in the country and that it could be competitive; from now on we will see how, thanks to this legal framework, passenger traffic will double in the country by 2028,” he said.
In addition, Asonahores supported the initiative because of the impact it will have on Dominican tourism, and the deputy director of the DGII explained how the new law will work, so that Dominican airlines can benefit from the incentives and thus be able to generate the expected economic impact.
The referred regulation contemplates the following tax incentives in favor of the national commercial air transport operating companies that comply with the requirements set forth in the law:
1) Total exemption from withholding tax on income payments abroad for leasing aircraft or aircraft engines and aircraft maintenance and repair services; engine parts and other aircraft parts;
2) Exemption from payment of the Tax on Assets declared in the General Directorate of Internal Taxes (DGII).
3) Unique and definitive withholding of only five percent (5%) of the tax on payments abroad for training and qualification of crew personnel by non-residents; use and maintenance of computer programs and software related to the operation of the aircraft and for the insurance of the aircraft.
4) Exemption from the payment of the Tax on the Transfer of Industrialized Goods and Services (ITBIS) in the sale of complete flights by Dominican operating companies to companies abroad (charter), as long as they are flights originating abroad and destined to the Dominican Republic.
5) Exemption from the payment of Duties and ITBIS on the importation of ships and aircrafts of subheadings 8802.30.00 corresponding to airplanes and other aircrafts, of weight in emptiness superior to 2,000 kg, but inferior or equal to 15,000 kg and subheading 8802.40.00 corresponding to airplanes and other aircrafts, of weight in emptiness superior to 15,000 kg.