Growth of 9% per year is part of the rewards brought about by incentives for the sector and the opening up of government by working in partnership with private enterprise.
Incentives for tourism have been vital to the creation of new projects in this sector. This is the view of Leonardo Torres, president of the Nicaraguan Chamber of Small and Medium Tourism Enterprises (Cantur), who spoke to Elnuevodiario.com.ni.
Employers claim that at least six projects have been delayed pending analysis by the Board of Tourism Incentives, which has not been in session since the departure of its president two months ago.
There are at least six investment projects in the tourism sector that should have been analyzed by the Board of Tourism Incentives, which, drowning in bureaucracy, is unable to hold sesion because a new president has not been formally chosen.
Summary of laws that encourage tourism investment in Panama, and procedures to follow to get the related tax benefits.
From the website of the Tourism Authority of Panama:
Laws on Incentives for Tourism Investment
In recent years, Panama has seen a boom in the tourism sector; coupled with the development of economic policies which promote investment across the country.
Between January and November 30th tax breaks for private investment projects were approved as well as 9 public ones, estimated at $95.7 million, up 125% compared to the same period in 2013.
Added to the approval for incentives for investments worth $95.7 million are more supplies for tourism, including 12 hotels, adding 283 new rooms. It is expected that by the end of 2014 incentives for investment in tourism will reach $100 million.
So far this year $82 million has been invested in tourism projects outside of Panama City, but the business sector has indicated there are obstacles to further development.
Law 80 of 2012, which provides tax incentives for tourism investment outside of Panama City has produced results, say entrepreneurs, but government support is still needed to remove some obstacles that prevent the development of tourism outside the capital from being even greater.
The Tourism Incentives Board has approved the granting of tax exemptions to build an airport in Guacalito de la Isla.
The airport will be built by the Corporación del Sur SA and will be located in the luxury resort of Guacalito del la Isla. The agreement approved by the Board of Tourism Incentives at the Nicaraguan Tourism Institute grants tax exemptions "... for the first stage of construction of the project, which will cost $12 million. "
In Panama, Desarrollo Golf Coronado has been accused of possible falsification of public documents and irregular use of tax exemptions for tourism.
An article in Panamaamerica.com reports that the Tourism Authority of Panama (ATP) found in the course of an investigation that Desarrollo Golf Coronado included in its list of beneficiaries of tax incentives for the tourism industry two farms that did not belong to the hotel project.
The recently approved Law 80 on tourism in Panama has granted incentives to companies who develop maritime tourism infrastructure.
The marine project in La Guaira in Colon and another in the Pearl Islands, which were recently approved, will benefit from this law.
"Mor Caribbean Corp. and Pearl Island Limited, SA will receive, under Article 4 of Act 80 of 2012, total exemption from import tax for five years on imports of materials, utilities, port facilities and piers.
In Nicaragua exemptions and tax credits for tourism activities can be exploited only by large investors.
Writing in Prensa.com.ni, businessman Rafael Córdova examines the actual results of the implementation of Act 306 of 1999 which declares tourism as an industry and characterizes it as an activity in the national interest.
Cordova notes that "Since the entry into force of the law, the process of receiving it benefits has worked very well for large tourism investments that meet a number of requirements such as company profiles, market research, investment plans, financial projections for a period of 10 years, land appraisals, architectural plans, ceilings, architectural elevations, etc.. "
The government, through the Ministry of Education, has presented a bill that would reactivate the tax incentives that have been suspended since August 2007.
The proposal would not only revive the system of incentives, but also encourages owners to improve their properties, and implements enforcement mechanisms for those who desist from renovating buildings declared as cultural heritage.
The amount of minimum investment required in the Tourism bill in order to be able to access tax incentives in Panama will be reduced to $250 thousand.
The Tourism Authority of Panama (ATP) has agreed to reduce from one million dollars to $250,000 the minimum amount of investment required to obtain tax incentives when building a hotel outside the district of Panama.
A draft bill proposes restoring and expanding tax breaks, especially for new ventures in the sector.
The government of Honduras is preparing a legal reform to the Tourism Act, a bill called "An Act to Update the Honduran Institute of Tourism, the Tourism Development and Update of Legal Rules in the Field of Tourism", reports Elheraldo.hn.
"It seeks to extend from 7 to 15 years the income tax payments for tourism projects that have obtained favorable resolutions in accordance with Article 32 of Law Efficiency Income and Expenditures, contained in Decree 113 - 2011, and that can lodge with the Ministry of Tourism, within one year from the effective date of this Act, an amendment to the resolution obtained to extend the period of exemption", reads the article.
Small and medium entrepreneurs in tourism and hotels are demand that a new bill include measures favorable to its segment and is not only conducive to large investors.
Representatives of the aforementioned industry complained that a new draft law which will be discussed by the National Assembly is exclusive and does not give economic benefits, reported Panamaamerica.com.pa.