In January 2007, the Honduran government, with the express purpose of promoting tourism and investment in the Bay Islands, passed the Bay Islands Free Tourist Zone law (ZOLITUR-Zona Libre Touristica del Departamento de las Islas de la Bahia). An administrative commission-made up of high-ranking representatives from various institutions- is currently writing policy that will regulate application of the law, and is expected to be completed in mid-2007. Update . . we are very close!
Under ZOLITUR, Bay Island residents will benefit from tax exemption on all imported goods and services. Simply put, if you are a resident, you'll be able to import duty-free any legal and non-restricted item you want. Vehicles will probably be restricted in some way. Another benefit will be lower prices, presumably retailers (importing duty-free goods) will lower the price of consumer, but you can still expect to pay the 12% sales tax in the store. Another benefit to residents is a capital gains tax of only 4% as compared to 10% on the mainland.
Tourism related businesses (hotels, resorts, restaurants, bars, gift shops, etc) will be the biggest winners with the elimination of income tax on revenue generated by registered ZOLITURE businesses and the current 12% sales tax on goods and services utilized in the business.
In other words, if a resident goes to the store to buy a TV, he/she will pay a 12% sales tax, but if a registered ZOLITUR business buys the same TV, it will not pay sales tax. Taxes that will not be changed include: entry fees ranging from $1 to $6 (depending on port of entry, nationality and resident status), municipal taxes and property taxes.
Revenue generated from these taxes will be used to fund environmental protection, security, infrastructure and other social projects.
Another issue covered by ZOLITUR is the possession of firearms. Carrying firearms in public places of any kind, including in vehicles will be illegal. Guns will only be allowed to be kept in homes. The above clause, along with the capital gains tax reduction are the only parts of the legislation that went into effect upon itâs passing. So the firearms and capital gains rules are currently in effect.
Before the rest of the ZOLITUR policy goes into effect, a census of Bay Island residents will be taken to verify eligibility for tax breaks; and ZOLITUR offices and warehouses will be opened to implement the new law. Once the policy goes into effect, existing and new business operating licenses for tourist related businesses (hotels, resorts, restaurants, bars, gift shops, etc.) will be renewed and extended by ZOLITUR authorities.
Bay Islands Governor Arlie Thompson, who sits on the ZOLITUR administrative commission, says of the new law, âWe are excited about the passage of the ZOLITUR law, which will benefit the residents of all three islands, Roatan, Utila and Guanaja, as well as new investors. We feel that ZOLITUR will improve the quality of life of Bay Island residents and provide opportunity for economic growth. Bay Island residents have traditionally been dependent on the fishing industry, which is no longer sustainable, and geographic limitations have not allowed them to develop traditional economic activities carried out by mainland Hondurans, such as agriculture, mining and other commercial activities.â
Regarding ZOLITUR policy, the governor went on to say, âThis is a complicated issue and we have to be very careful how we implement the law. All three islands should benefit uniformly from the law. One way of insuring this occurs is by evening out the municipal and property taxes in all four municipalities: Utila, Roatan, Santos Guardiola and Guanaja. In this manner, investors wonât benefit from lower taxes in one area over another. Hopefully, we will be able to implement this aspect (even out taxes), as the main
objective of ZOLITUR is to improve tourism services and attract new investment, thus stimulating the Bay Islands and the Honduran economy.â
... taken from "2007 Roatan Relocation and Investment Guide"