That's what happens when you have to borrow so much money from the World Bank and the IMF. You lose your sovereignty.
Dominicanos pagan m?s IVA (ITBIS) que centroamericanos
Dominicanos pagan m?s IVA (ITBIS) que centroamericanos
- Thread starter Frank the Tank
- Start date
Dominicans Pay Highest ITBIS In Region
The simple reason why there has to be so much tax on goods and services is that Dominicans will not pay their income or company tax nor their property tax ..so what alternative has the government got but to have a relatively high ITBIS
i agree. articles in dominican papers say that over half of all working dominicans are employed in grey zone: no taxes, no social security, no contracts. of those who work many, if not most, fall under the lowest limit and are exempted from paying impuestos sobre la renta (under 33k pesos a month or so). same with property tax. since so many built on stolen properties and have no titles or paperwork and so many live in barrios/campo in houses below the value where the property tax is applied.
there is no other way for the government to make money but to introduce taxes that apply to every person, apart from those who may be self sufficient. ITBIS is something all dominicans fork out, one way or another. even thou there are many products exempt, a large part of canasta familar is taxed.
So laughable. Just the other day I bought some ice cream at Valentinis for my little girl. Little pink 'dilly bar' looking thing, the ITBIS was 55 pesos. Over $1 USD in taxes for something I could get at DQ in the states for $1.50.
Best part is, the $700 or so I pay monthly in ITBIS means nothing to folks who think I don't belong here because I don't have residency.
Best part is, the $700 or so I pay monthly in ITBIS means nothing to folks who think I don't belong here because I don't have residency.
it's more likely that they don't charge it to keep the prices low. but considering that they buy in almacenes/surtidoras, which are larger businesses and registered a portion of ITBIS is paid on the items colmado owners buy. there is really no escaping it.
Tax evasion is an inbred trait of Dominicans. We carry this awful trait overseas as well when it benefits us.
Once we have all the people on real and virtual bank accounts, the paper/metal in circulation is removed and the new e-money system in place, taxes will flow and show the real strength of the local economy.
This is one of the reasons the gov is working hard on the banking system to include all the people into the fold. Laws are being passed to protect the account holders and limits on what banks can charge or place fees upon are also being introduced.
Bank cards with the chip also are being mass introduced to the DR to curtail card-fraud. The DR is also working with the U.S. and Interpol to treat card fraud committed against foreign cardholders as crimes to be prosecuted back in the country of the card- holders' issuer. They will be treated as international crimes and the maximum penalty sought after them, where it will be harshest.
Once we have all the people on real and virtual bank accounts, the paper/metal in circulation is removed and the new e-money system in place, taxes will flow and show the real strength of the local economy.
This is one of the reasons the gov is working hard on the banking system to include all the people into the fold. Laws are being passed to protect the account holders and limits on what banks can charge or place fees upon are also being introduced.
Bank cards with the chip also are being mass introduced to the DR to curtail card-fraud. The DR is also working with the U.S. and Interpol to treat card fraud committed against foreign cardholders as crimes to be prosecuted back in the country of the card- holders' issuer. They will be treated as international crimes and the maximum penalty sought after them, where it will be harshest.
Exactly. What they end up is actually converting ITBIS they pay into the final price.
Imagine you buy at 80 pesos, plus 18%, that is 94.4 pesos.
If they are not registered and sell at 25% markup, they sell at 118 pesos.
Now, if they were registered for ITBIS, they would buy at 80 plus 18% would still be 94.4, but they would get 14.4 pesos ITBIS credit.
They would sell at 25% markup, that is at 100 pesos plus 18%, which is the same 118 pesos.
Out of that, they would perceive 18 pesos in ITBIS, which they would remit to DGII but they have 14.4 pesos ITBIS credit from purchase at warehouse, so they only remit 3.6 pesos in ITBIS.
This way, the consumer pays the same (118 pesos), the warehouse receives the same money (80 pesos), but the colmado gets to keep more profit without paying ITBIS (23.6 pesos instead of 20 pesos) and the state receives less money in ITBIS (18 pesos instead of 14.4 pesos). This is because they calculate their 25% markup on ITBIS, which they assume as cost instead as a form of transfer pricing.
The consumer does not care, because what he pays is the same.
Now, of course, colmadero could give up the 3.6 pesos in additional profit by charging customer 114.4 instead of 118 pesos, in this case the winner would be consumer and the loser would be the sate, while the colmado and warehouse would receive the same amount of money as through transparent ITBIS pricing (80 pesos revenue and 20 pesos profit respectively).
But would a colmadero do that? Fat chance! First, he would be foregoing his own profit (tough luck) and second, he would need to get into all this net-of-ITBIS calculations, profit margins, ITBIS, etc. too much headache for nothing.
At the same time when we will be able to use only carrier-approved phones in the DR. Bye bye my dream Meizu MX5 with 42 megapixel camera at half the S6 price ... hopefully it won't happen before its planned fall 2015 release
fat chance
rubio, you iz smart. yesterday miesposo was explaining me exact same thing about calculating ITBIS and i understood nada well, apart from the fact that a part of ITBIS is paid to the state this way or the other.
i don't really think it is avoidable. after all everyone craps and there is ITBIS on toilet paper. i doubt many folks still use corn husks to wipe their ass. chloro, disinfectants and soaps also carry the tax. same with dominican staples: beer and rum. there is also ITBIS on sugar, coffee and oil, a must in every dominican house. and ITBIS on all communication services, including mobile phones.
well, apart from the fact that a part of ITBIS is paid to the state this way or the other. i don't really think it is avoidable. after all everyone craps and there is ITBIS on toilet paper. i doubt many folks still use corn husks to wipe their ass. chloro, disinfectants and soaps also carry the tax. same with dominican staples: beer and rum. there is also ITBIS on sugar, coffee and oil, a must in every dominican house. and ITBIS on all communication services, including mobile phones.
Beer, Rum and coffee also carry selective tax. Not 100% sure about coffee, but rum and beer do (all alcohol and tobacco does). First, selective tax is imposed, and then ITBIS is charge don top of that. So you end up paying 18% off the selective tax as well, basically a tax of a tax.
here is a very interesting article about impuesto sobre la renta (income tax) and its relation to DR's GDP:
RamonF: EVASION FISCAL PRINCIPAL PROBLEMA DE REPUBLICA DOMINICANA Y LATINOAMERICA
you may note that those taxes are a minuscule percentage of GDP in comparison to other latin countries.
here you can read that taxes from only 10 companies in DR make for 50% of DR's domestic revenue:
Las 10 empresas que mantienen al Estado dominicano con la retenci?n y el pago de impuestos - Acento - El m?s ?gil y moderno diario electr?nico de la Rep?blica Dominicana
RamonF: EVASION FISCAL PRINCIPAL PROBLEMA DE REPUBLICA DOMINICANA Y LATINOAMERICA
you may note that those taxes are a minuscule percentage of GDP in comparison to other latin countries.
here you can read that taxes from only 10 companies in DR make for 50% of DR's domestic revenue:
Las 10 empresas que mantienen al Estado dominicano con la retenci?n y el pago de impuestos - Acento - El m?s ?gil y moderno diario electr?nico de la Rep?blica Dominicana
The computer system to support that with the required redundancy is veeeeeery expensive!
The banking and biz sector are ready, the gov isn't...
The gov is waiting to finalize the public Fiber Optic trunk, before it goes to second phase. The system will have a side of the Fiber for public use and the other strictly for the local monetary system to avoid potential hacking from the outside or interruptions based on military/war/terrorism activity.
Your DR based chip card will not work outside the DR, and your international for use issued DR card will not work inside the country. Totally isolated bi-system.
The DR will soon have a country-owned card system, much like Visa or MC do. This will be the basis for credit issued to the DR only based card, whilst the external DR issued card will work with those mentioned here and others alike.
Think of it as an isolated national WAN with Wi-Fi access, including wireless cells, but running in tandem with bank's networks.
A pilot test was conducted last year on a sector of the banking system services, but it was found to be impossible to secure it from outside hacks and/or attacks based on intentional intruders. The hacks/attacks were identified and later blocked, but the potential damage it inflicted was too risky for a real scale system gone live.
The gov will wait until the trunk is laid as needed for it to work in a secured fashion which will not lend the monetary system of the country to manipulation or attacks from the outside.