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After the approval of the changes to the Tourism Law of Ecuador, A series of benefits will be presented to both airlines and passengers.
The 22 march 2024, The National Assembly of Ecuador approved a series of modifications to the country's Tourism Law, This with the aim of providing better conditions for the development of the sector as well as making the country more competitive., In this installment we will review the direct benefits for the aviation industry.
Tourism Law wins for airlines and passengers
The Tourism Law, approved by the National Assembly of Ecuador, brings benefits for airlines and passengers through the reduction of the Tax on Foreign exchange outflow (ISD) and the price of fuel.
Of course this is what, if tourism grows, Aviation is also growing and vice versa, since they are highly dependent industries, but on this occasion we are seeking to give a new boost to our decaying aeronautical industry., that in this 2024 has had more bad news than good news.
No ISD for airlines
This topic is not new, since the ISD was previously removed for foreign airlines, but this time it is expanded, it was time, for also Ecuadorian companies.
Exemption from the Foreign Exchange Exit Tax (ISD) in payments made abroad by national and foreign airlines that operate within, to and from Ecuador and that have the document that proves that they have been designated or the operating permit issued by the aeronautical authority to operate services at a national or international level..
This reduction will allow Ecuador to be more competitive in the region and also allow the companies that operate here to obtain better benefits from their air operations in the country..
QB fuel tax reduced
I have been talking about this topic for years. one of the ways to reduce the price of tickets in Ecuador, since the charge goes directly to the price that passengers pay on international flights.
what do i mean? This is known as the QB tax, which is an additional value to the 5% for fuel cost, which was implemented when the value of oil exceeded $140 per barrel, and today it continues to be charged regardless of the value of the fuel, directly affecting the consumer.
The progressive elimination of the tax 5% to the issuance of fuel enshrined in art. 31 of the Civil Aviation Law. The reduction will be one percentage point per year until reaching the 0%.
The effect will not be felt more than a 1% year, but it undoubtedly represents something positive for passengers, since also since April we will have to pay 3% for VAT.
What do you think of these measures and is there anything else to do??
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