April 12, 2024 #ChileDemocratic

Government presents bill to directly stimulate the tourism sector

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The proposal considers the creation of a 1.25% tax on the price of lodging contracted by foreign tourists, which will increase public resources for the promotion of our country.

With the aim of reactivating one of the sectors most affected by the Covid-19 pandemic and shortening the gaps that still exist in the arrival of foreign tourists to our country, the Government
of President Gabriel Boric announced the submission of a bill that contemplates the implementation of policies that promote the reactivation of the sector and strengthen its capacity to attract international tourism

The initiative considers three measures which, together, are expected to significantly boost this sectorwith important effects on other economic sectors that are connected to tourism, such as the gastronomic sector and commerce, which together should increase the number of foreign visitors by at least one million per year.

In order to increase the entry of foreign tourists to Chile, the bill establishes that the resources for international tourism promotion will be increased by US$10 million per year, which implies more than doubling the resources that the country invests in tourism promotion. Thus, investment in international tourism promotion would reach US$20 million per year. To finance the increase, a tax equal to 1.25% will be levied on the price of lodging services in national territory contracted by foreign tourists.

The objective of this bill is to position Chile as an attractive place for tourism and foreign investment.

In order to determine the destination of the funds, the Commission for International Tourism Promotion is created, with equal public-private participation, which will be in charge of defining the marketing plans that seek to promote Chile as a tourist destination abroad . Market Committees are also created, with equal public-private participation, in charge of defining the actions for the execution of the Marketing Plan defined by the Commission for the Promotion of Tourism.

It is projected that with this measure, more than 1 million additional tourists per year will enter the country, recovering and even surpassing the levels observed before the pandemic.

The Minister of Finance, Mario Marcel, highlighted the projected arrival of 1 million additional tourists to Chile, because "it means more activity for the sector, more employment, more indirect effects for all the suppliers of the tourism industry. And especially also more activity in the regions. Tourism is an activity that is fundamentally developed in regions other than the Metropolitan Region, therefore it also helps us to strengthen the economic base of our regions".

Likewise, the bill proposes that foreign tourists may request a VAT refund for movable goods purchased in national territory for personal use or consumption outside the country, emulating VAT refund models for tourists that exist in the European Union and countries such as Uruguay. These goods are all those that a tourist may carry in his/her luggage when leaving the national territory, provided that, in total, the weight of the goods for which the refund is requested does not exceed 23 kg.

One of the proposals is to refund VAT to visitors for purchases made in national territory, as well as to foreign audiovisual productions.

For the Minister of Economy, Development and Tourism, Nicolás Grau, "What we are presenting today is the result of a public-private articulation that in this case has been especially positive . It was precisely the initiative of the hotel sector that reached the Ministry of Finance, with the idea of seeing how we can creatively generate more resources to make a quantitative and qualitative leap in investing in our country's image and thus attract more foreign tourists".

Finally, with the aim of positioning Chile as an attractive place for foreign audiovisual productions, both for the development of short films, documentaries, series and movies, the draft initiative proposes to create incentives similar to those implemented by countries such as New Zealand, such as a VAT refund for all services contracted in Chilean territory by a foreign audiovisual production company. It also proposes a Registry of National Audiovisual Producers, through which foreign audiovisual production companies will have the option of centralizing their contracted services in national territory, in order to facilitate the operation of the VAT refund.

"Encouraging the arrival of audiovisual productions not only contributes to boosting the industry and employment in the sector, but also makes the country's culture and heritage known to the rest of the world, increasing Chile's tourist attractiveness and contributing to national, regional and local economic growth and development. This announcement is in addition to another we made a few weeks ago together with the Ministry of Economy and CORFO, about the opening of a new call for the High Impact Audiovisual Investment Support Program (IFI Audiovisual)," said the Minister of Culture, Arts and Heritage, Carolina Arredondo.

The bill should enter the Chamber of Deputies next week, since it contains tax regulations. The authorities hope that the initiative will be processed quickly.

Check out the article on the official website of the Undersecretary of Tourism.


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