In the next five months Guatemala could have the opportunity to join the regional proposal to lower the costs of exit taxes to flights destined for Central America. According to Ronny Rodriguez, Volaris’ director of corporate development for that region, this is the approximate time when the bill, already proposed in Costa Rica, could be approved and regulated. However, Rodriguez explains that if Guatemala does not legislate as Costa Rica is doing, it could be left behind due to the lack of reciprocity that conditions the proposal.According to the World Bank, limited competition and airport highs imposed on regional tickets are part of the problem of high costs for air travel in Central America. Rodriguez noted that the World Bank’s approach seeks to ensure that the set of taxes and charges will give an amount no greater than US$15 per country. In this way, according to Rodriguez, ticket prices would be reduced and the number of tourists to the country could triple, they talk about 200% of new travelers who are not currently traveling, Rodriguez said.Currently, taxes and exit charges represent about $50 per country, Rodriguez explained. Guatemala has a total of US$32.58 in entry and exit taxes, while Costa Rica has US$58.48. Because of this, the World Bank states in its study that the cost of air tickets increases due to taxes and not necessarily for the ticket itself.Guatemala, is not currently the most attractive country in an airport way, according to Lisardo Bolaños, technical coordinator of Guatemala No Se Detiene, so, from this change, the activation of this sector would be sought and greater benefits to attract tourism activity. This idea, Bolaños added, derives from the good practices of the European Union, where air tickets are cheaper and more convenient to visit the different countries of Europe.
Initiative progressed in Costa Rica
Costa Rica took an important step, said Rodriguez, who mentioned that the law, already approved in its first debate, lowers the exit tax to US$14. However, in order for this to happen, the law places two conditions: that anyone travelling from Costa Rica to any other destination within the Central American region directly or with scale will pay an exit tax of US$14, provided that the total taxes do not exceed US$23 both in Costa Rica and in the other country to which you want to travel.This, as Rodriguez explained, refers to the fact that for its operation, the country of destination must also reduce taxes. This is a real Central American public policy, said Rodriguez, who pointed out that from this, foreign exchange of economic development would be generated, extending the number of nights in Central America and creating more tourism within the countries of the region.However, it is important to start imitating Costa Rica. According to Bolaños, the problem is not to be the first country to have this law, but to be the second. If we like Guatemala are the first or second country I think we won an advantage,” Bolaños argued, who said that if Guatemala is the third country or even the last, it would become much less attractive and agreements between travel agencies would be lost.The law in Costa Rica will be discussed in second debate at the end of November, according to Rodriguez, who points out that there is enough consensus to approve it. As of November 1, taking into account the need for the signature of the country’s president and the regulation – for which the law grants three months, Guatemala and other Central American countries would have approximately five months not to be left behind in this initiative.
Need for reciprocity
The idea of this proposal is to lower prices in such a way that there is reciprocity, explained Bolaños, who pointed out that because of this, the law would not operate immediately, but would move forward as the other countries join.What we are looking for is to promote more tourism within the region, recognizing that there are already other countries, specifically Costa Rica, that manages to attract a greater amount of tourism and where we end up being complementary, said Guatemala’s technical coordinator No Se Detiene. To the extent that the reduction in rates, both in Guatemala and Costa Rica, a greater probability of tourists who are not interested only in Costa Rica, but also for Guatemala, said Bolaños.Costa Rica’s initiative has only two articles, Rodriguez said, and suggested that in Guatemala be as similar as possible. “That’s what else is achieved, let the airlines lower their costs,” Rodriguez said.Since the implementation of this agreement, there are about 10 million potential tourists for Guatemala, according to Rodriguez, who pointed out that from this incentive, Europeans, Americans, Canadians and Asians who have already visited some region of Central America are interested in visiting Guatemala.
Benefits and implications
Motty Rhodes, executive director of the Guatemalan Airline Association (AGLA), said that effectively, the benefit would be mainly for passengers and then for airlines that have flights within the Central American region. However, he mentions that airlines that do not have these flights could be attracted to including these routes as long as a substantial increase is observed in the market.However, Rhodes explained that it is not so simple, since there are international conventions that do not necessarily allow these flights. “They are different permits,” Rhodes said; in addition to this, Rhodes mentions that the decision to look for these routes is at the discretion of each airline.”Let us remember that in Guatemala, the exit tax is divided into various institutions,” said Rhodes, who mentioned that this amount is part of the budget of the Guatemalan Institute of Tourism (Inguat), the Ministry of Education (Mineduc) and Culture, among others, to survive. Rhodes pointed out that those who would affect should be taken into account if the amount of departure is not counted.
This article has been translated after first appearing in Prensa Libre