Colombian government seeks to extend tax benefits for tourism

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Colombian government seeks to extend tax benefits for tourism
Source: Mincomercio
Wed July 21, 2021

Minister María Ximena Lombana affirmed that the measures implemented have allowed tourism service providers to face restrictions due to the pandemic


Within the articles of the Social Investment Project that the National Government will file this July 20 in the Congress of the Republic, it is proposed to extend the tax benefits that were established in the Tourism Law (Law 2068 of 2020), to leverage the economic reactivation insurance of this industry in Colombia.
The temporary suspension of the payment of the energy surcharge, the VAT exemption for hotel services and the extension of the term for renewal of the National Tourism Registry (RNT) until December 31, 2022, are part of the proposals with those that the National Government hopes to help the value chain of this industry.

According to the Minister of Commerce, Industry and Tourism, María Ximena Lombana, who advanced the management so that these three benefits were included in the initiative that is being considered today by the Legislature, the exemptions from the payment of the energy surcharge and the Value Added (VAT), have allowed tourism service providers to face the isolation measures and the closure of borders that were decreed to deal with Covid-19.

The isolation and closure decisions affected the dynamics brought about by tourism development. For example, of the 310,000 non-resident visitors who arrived in the country in September 2019, the figure rose to 15,000 in the same month of 2020. In addition, land passenger transport went from 11 million per month in 2019 to less than 2.5 million per month in 2020 (between April and December). This decrease translated into a drop in the added value of the sector of $ 17 billion, according to the DANE report.

Despite this scenario, Lombana explained, the tax benefits offered by the government allowed entrepreneurs to keep their businesses afloat during closures.

"These incentives motivated the sector's reactivation from October 2020 and made it possible for by February 2021 to have nearly 400 thousand additional non-resident visitors and an average of 4.2 million land passengers per month," he said.

For the reasons stated, it is important to extend the deadlines for tax exemptions, the Minister emphasized. "This support will allow Tourism Service Providers to have greater possibilities of creating jobs and generating profits, while demand returns to 2019 levels," he added.

He also referred to the importance of increasing the term for the renewal of the National Tourism Registry until March 31, 2022.

Those who did not comply with that commitment on the scheduled date this year must pay one (1) SMMLV. This cost generates an additional burden on providers who wish to remain in the RNT, which becomes a barrier to formalization in the midst of the current situation. 

The Ministry of Commerce, Industry and Tourism considers it necessary to expand the tax benefits included in the Social Investment Project in order to sustain tourist activity in Colombia in this phase of safe economic reactivation.

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