Dining Out This Weekend? Your Bill Just Got 7% Cheaper — VAT Drops to 8% for Carnival

If you're eating out, booking a hotel, or hiring a tour guide this Carnival weekend, you should be paying less tax than usual. Significantly less.

What Changed

Executive Decree 304 temporarily reduces Ecuador's IVA (value-added tax) from 15% to 8% for tourism-related services during the Carnival holiday — February 14 through February 17, 2026.

That's a 7-percentage-point discount on every qualifying transaction.

What's Covered

The reduced rate applies to 10 categories of tourism services:

1. Accommodations — hotels, hostals, Airbnb-style lodging (if registered)
2. Restaurants, bars, and entertainment venues
3. Travel agencies and tour operators
4. Tourist transport — shuttle services, charter buses
5. Event organization
6. Convention centers
7. Tour guides
8. Community tourism operations
9. Theme parks and attractions
10. Thermal baths and recreational facilities

The Catch

The business must be registered in the national tourism registry (Catastro Turístico) to qualify. Most established restaurants, hotels, and tour operators in Cuenca are registered. Street food vendors, market stalls, and small informal businesses probably aren't.

What to Look For on Your Receipt

Your factura (receipt) should show IVA 8% — not 15%. If a qualifying business charges you the full 15%, you have the right to file a complaint with the SRI (tax authority).

The Math

On a $50 dinner for two:

• Normal IVA (15%): $7.50
• Carnival IVA (8%): $4.00
• You save: $3.50

On a $100/night hotel:

• Normal: $15 in tax
• Carnival: $8 in tax
• You save: $7 per night

It's not life-changing money on a single transaction, but over a four-day weekend of dining out, it adds up — especially if you're hosting visiting friends or family.

Why They're Doing This

The government wants people spending money during the holiday rather than staying home. Tourism is a major economic driver during Carnival, and the IVA reduction is meant to boost demand. Last year, the Carnival feriado generated significant domestic tourism revenue, and the tax break is designed to amplify that.

It also helps that it's good politics heading into campaign season. Sectional elections are in February 2027 — exactly one year away.

Source: El Mercurio, SRI