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Daily News - 2 January 2001

DR1 wishes all the best in the New Year!
Fiscal and tariffs reform are law
President Hipólito Mejía passed the Tariffs Reform 146-00 and Tributary Reform 147-00 that had been approved on Tuesday, 26 December by Congress.
The new tariff reform law establishes a maximum customs tax of 20%, down from 35%. The new tariffs will be 0%, 3%, 8%, 14% and 20%. The passing of this law opens the way for the congressional approval of the Central American and Caribbean free trade agreements signed during the Fernández administration.
The government also turned into law effective 1 January the tributary law which provides for increases on taxes on items deemed "luxury" items and the increase of the value-added ITBIS tax from 8 to 12%. Examples of items that are already showing their new prices are beer (now taxed at 25%), rum and wine (35%), whisky (45%). The law set a 12% tax on advertising (this is expected modified by a new law that will reduce it to 6%).
The law also sets a ceiling of 4% interest on monthly financing charges on credit card purchases, and a ceiling of 5% on loans obtained by banks and foreign companies from abroad. It features a reduction in taxes on donations and inheritances, a tax exemption on real estate ownership for property valued up to RD$2 million. Also included are tax exemptions on the import of books, magazines and newsprint, on basic food stuffs and farmer equipment. Income tax levels in the DR are now set at:
RD$120,001-RD$200,000 15%
RD$200,001 to RD$300,000 20%
Above RD$300,001: 25%
Companies will pay 25% income tax.
The new law establishes that companies with annual sales over RD$2 million need to make an advance on taxes of 1.5%.
"Gentlemen's Pact" expedites passing of bills
The tributary and reform bills, known as the "paquetazo" were passed by the PRD deputies with the support of former President Balaguer and the PRSC deputies. The passing resulted after a "pacto de caballeros," or gentlemen's pact agreed upon by former President Balaguer with President Hipólito Mejía and the president of the Partido Revolucionario Dominicano, Hatuey de Camps. The pact permitted the approval of the bill as passed by the Senate. The Chamber of Deputies did not reform it despite this house inviting affected sectors to debates. PLD deputies opposed the bill.
The passing of the bill received a boost when the government allotted legislators an additional RD$196 million to be used by foundations managed by the deputies.
Perspectives ahead
Guillermo Caram, a PRSC leader, said that the passing of the "paquetazo" was not necessary and will bring about widespread tax evasion, decelerating of the economy and an increase in unemployment.
José Manuel López Valdez, president of the Association of Commercial Banks, said that the tributary reform would strengthen public finances and increase government income. He said this would enable to government to expand public health and education programs. He forecast that if the government achieves fiscal equilibrium, there should not be inflation. He forecast for the Listín Diario that there should be a more stable exchange rate, and said that now that the uncertainty period is over, there are expectations for better times ahead. He said that now that the uncertainty is behind us, people should be able to use their savings and move on planned projects.
President of the Senate, Ramón Alburquerque forecast the country would soon feel the positive effects of the declining price of the barrel of petroleum. Hoy newspaper also points out the positive effects of the textile parity bill will soon be felt in an increase in employment in apparel free zones.
The president of the Council of Businesses (CONEP), Celso Marranzini feels that the passing of the "paquetazo" will result in price increases, mass firings of employees as many companies will not be able to pass on to consumers the increases.
President Hipólito Mejía responded to Marranzini's comments saying that businessmen "are not presidents nor leaders of the country." He said that the poor now have a godfather in the National Palace.
Sustaining macroeconomic stability while reducing interest rates is next
According to a report in El Siglo, the Central Bank will start implementing a new economic model whereby it will concentrate on controlling inflation, lowering interest rates, rather than on controlling the exchange rate.
Along these lines of modernizing the management of the economy, the Monetary Junta announced the approval of a strategic five-year plan to gradually eliminate the use of the mechanism of issuing certificates of participation to make up for government overspending. The certificates are issued to reduce money in circulation, but are unfair competition to banks and this time resulted in interest rate hikes such as the 12 point leap in interest rates in less than three months time.
The Bank says it is now contemplating using mechanisms such as international financing through bonds taking advantage of its good standing regarding foreign debt payments.
The Central Bank says it will emphasize fiscal equilibrium on behalf of the government to avoid increases in prices of items in most demand. The Central Bank forecasts Gross Domestic Product will grow 6% in 2001, and inflation will be single-digitted, as long as petroleum prices remain under US$28 the barrel.
The report says that the government will focus on increasing social expenditures for a better distribution of wealth in the country.
Furthermore, the Central Bank, as reported by El Siglo, announced it is working on a project to renegotiate 50% of the nation's foreign debt, by issuing bonds on the international money markets. This would make it unnecessary for the country to request an IMF stand by loan.
The Central Bank says that the debt situation is manageable. This year, the service of the foreign debt is about US$585 million, of which US$300 million are capital and the rest interest payments.
40% increase on some brands of cars
The Asociación de Concesionarios de Fabricantes de Vehiculos (Acofave) forecasts that prices of some brands of cars will increase 40% as a result of the passing of the "paquetazo". The combination of increases on the luxury item tax that affects vehicles and the increase in the ITBI tax that has gone up from 8 to 12%, will add up to 40% increases in some cases. The Acofave, that represents importers of vehicles in the DR, forecasts massive firings of employees in dealerships. The association said that sales were up 60% in days prior to the passing of the law, as consumers sought to get ahead of the anticipated price increase. Vehicles in the DR pay a 20% tax. The extra tax (luxury tax) is as follows:
tax rate of:
The new taxes on vehicles are:
Vehicles up to US$10,000 will not pay the luxury tax.
Vehicles from US$10,0001 to US$12,000 pay 15%.
Vehicles from US$12,0001 to US$14,000 pay 30%
Vehicles from US$14,001 to US$20,000 pay 45%.
Vehicles from US$20,001 to US$31,000 pay 60%.
Vehicles from US$31,001 and above pay 80%.
10% salary increase for public sector
President Hipólito Mejía announced a 10% increase in public employee salaries. Celso Marranzini, president of the Consejo Nacional de la Empresa Privada, and Andrés Dauhajre of the Union Nacional de Empresarios also said they would be in favor of an equal salary increase in the private sector. Union leaders oppose the increase, and are demanding a 35% increase. Private sector groups have yet to start negotiations for a salary increase.
Stores soon to be required to separate tax from price
Teófilo Tabar, director general of the Tax Bureau (DGII) announced that in 2001 his department is working on ways to make transparent the paying of the value-added ITBIS tax. He announced that store invoices should feature separately the price of the article and the tax on the item. While many stores already do this, in several the tax is included as part of the price. He said businesses should also list the items that are exempt from the ITBIS tax, including many food products. There will be standard billings and cross checking of information to reduce tax evasion, he announced for 2001.
Public employees to be paid every 15 days
The Mejía administration announced it will now pay employees every 15 days. The next government payday will be 15 January, and subsequently 30 January. This is standard practice in private business. The government had traditionally paid on the 25th of every month. President Mejía said the measure seeks to bring new dynamism to the economy and to reduce the need of public employees to get advances on their salaries from shark loans. President Mejía spoke while vacationing at the Juan Dolio presidential vacation home.
Finding a formula to move ahead on Rosario gold mine project
The government is moving ahead with the project to exploit the sulfurs of the Rosario Mining Pueblo Viejo gold mine with a long-term lease to an international mining company. The Pueblo Viejo concession is located in the center of the Dominican Republic and the reserves are considered to be in the "world class" gold mine category. The proven in-situ geologic sulfide resources are approximately 30 million ounces of gold. Gold production from the oxide reserves during the period 1975-1992 totaled 5 million ounces of gold and 22 million ounces of silver. The exploitation of the underlying sulfide reserves requires the application of advanced mining technologies able to process these metallurgical complex refractory ores.
The tender had started in 1997 under Salomon Brothers, but sources say that one of the major issues that put a stop to its conclusion was who would pay to clean up the contamination that had already occurred because of delays in contracting an operator. Further delays have increased the cost of the clean up. Another issue is who will be responsible for the accumulated debts of the Rosario Mining operation.
Pedro Vasquez Chavez, director of Mining, and Miguel Peña, director of the Unidad Corporativa Minera are supervising the tender preparations. They say the contractor would commit to exploit the sulfide resources using methods that guarantee environmental protection.
According to the government so far Newmont Mining Corporation, Mount Isa Mining Holding LTD., Goldfield Corporation and Barrick Gold Corporation have registered to participate in the tender. Other companies have shown an interest.
2001 budget to be RD$65 thousand million
The 2001 budget will be RD$14.8 thousand million greater than that of 2000. The budget set at RD$65,176.7 million is 29.4% more than last year's. The budget will use internally generated resources, with only 5.8% of the monies coming from foreign sources. Several main government department budgetary allotments are: Ministry of Finances RD$14,796,012,341
Ministry of Education RD$9,856,995,250 (RD$8,100.1 million in 2000)
Ministry of Public Health RD$7,212,245,491 (RD$7,959.7 million in 2000)
Presidency RD$6,780,711,071 (RD$6,657.5 million in 2000)
Ministry of Interior and Police RD$5,040,860,155 (RD$3,709 million in 2000)
Ministry of the Armed Forces RD$4,514,659,880
Ministry of Public Works RD$4,082,556,501 (RD$4,249.6 million in 2000)
Ministry of Agriculture RD$3,870,676,857 (RD$4,076.7 million in 2000)
Ministry of Environment RD$2,345,373,104 (new for 2001
Ministry of Industry and Commerce RD$1,402,439,731 (RD$475.8 million in 2000)
Ministry of Sports RD$900,443,547 (RD$808.5 million in 2000)
Ministry of Foreign Relations RD$491,977,297 (RD$408.9 million in 2000)
Ministry of Culture RD$301,116,777 (new for 2001)
Ministry of Tourism RD$229,284,190
Ministry of Women RD$165,965,859
Ministry of Youth RD$149,907,220
Ministry of Labor RD$137,995,225
Legislative Branch RD$779,737,140
Judicial Branch RD$966,418,830
Central Electoral Board (JCE) RD$657,682,947
Chamber of Accounts RD$41,405,825
The budget includes RD$196 million for foundations directed by legislators.
President travels to Puerto Rico, many other visits announced
President Hipólito Mejía traveled to San Juan, Puerto Rico today, Tuesday, 2 January to attend the inaugural of Puerto Rican governor-elect, Sila María Calderón. He said he would take advantage of the visit to meet with businessmen in the areas of communications, trade, banking, construction, mining, insurance, free zone industries, apparel and pharmaceuticals. President Mejía also announced that he has programmed eight other trips for the first semester of 2001. These are to Canada, Germany, England, Sweden, Japan, Korea, and Hong Kong. President Mejía also said he would like to visit Finland and Norway, where major investors have shown an interest in the DR. He said he has on agenda a visit to India and to Arabian countries during his mandate.
81,127 traffic accidents in 2000
National Police said that in 2000 there were more than 81,127 traffic accidents. Hoy newspaper said that this means there were about 222 accidents per day. Police reports show there were 793 deaths and 46,613 persons injured in traffic accidents.
The Police released the good news that the measures taken to reduce accidents over the holidays were effective. Over the New Year holiday there were reports of 25 deaths, and 129 injured in traffic accidents, brawls, or intoxication. The Center for Emergency Operations said this was less than over the 1999-2000 New Year holiday.
New fuel prices
Premium gasoline RD$38.65 (down from RD$38.75)
Regular gasoline RD$34.02 (down from RD$33.80)
Premium diesel RD$25.58 (down from RD$25.41
Regular diesel RD$23.50 (down from RD$23.34)
GLP RD$19.23 (RD$19.23)
Check for fire escape ladders
Engineer Rafael Corominas Pepín, one of the nation's experts on earthquakes, said that many of the high rise towers apartment buildings are going up without fire or earthquake escape exits/ladders. He told the Listín Diario that the priority of cutting costs, and making them impregnable by robbers or assailants have lead these to become mortal traps in case of fires or earthquakes.
Former General murdered in Abreu
Former Secretary of the Armed Forces Juan Rene Beauchamps was murdered in his Abreu, Cabrera, province of Maria Trinidad Sanchez on Tuesday, 26 December. The 70 year old former military died from a gunshot wound fired by a gun held by a man that was barely 50 centimeters away, as per the autopsy report.
The murder was witnessed by Maria Guzman Almonte, a 37 years old, who was accompanying the former chief of the Armed Forces as he returned to his Abreu farm home at around 10:30 pm. She witnessed the homicide and later suffered through being raped by the assailant.
Some news reports speculate that the murderer did so in vengeance over a brutal beating that Beauchamps inflicted on the assailant's father. Others say the motive was robbery. The assailants, suspect to have been four, were inside the Beauchamps home prior to these arriving. The general was unarmed at the time. Reportedly they stole a pistol and a rifle from the home.
The police has arrested 23-year old Henry Rafael Acevedo Santos after a four-hour pursuit. Mary Guzmán identified him as her rapist, according to news reports.
The National Police changed the commander of the police in the area.
News reports say the authorities suspect the same gang killed by gunshot Canadian Robert Ethier, a well known healer and a spiritual teacher who made the Dominican Republic his home twenty years ago and was murdered on 24 December in nearby Cabrera. There have been similarities in the two murders. Ethier was shot to the torax by the assailants that later fled when one of the shots hit the ceiling, making watchmen aware of their presence. The same gang is also suspect of being responsible for the aborted holdup at gunpoint of Rafucho Alonso, who had sold the land to the murdered Canadian. His assailants fled when Alonso confronted them at gunpoint.
Thousands of travelers delayed by snowstorm
The return to the US of an estimated 3,000 passengers was delayed by the snowstorm that forced the closing of the JFK and Newark International airports. The passengers had to confront the frustrations of lack of information on their rescheduling plus long stays in the Puerto Plata and Las Americas airports.
Príamo Morel passes away
Outstanding cartoonist Príamo Morel died on Friday, 29 December at his Gaspar Polanco 80 home in Bella Vista neighborhood. His health had been delicate since 1997. He died of a brain hemorrhage. A prolific artist, he is best known for the nearly one million cartoons and political satiric illustrations.
NBA basketball player visits at Casa de Campo
Julius Erving, the star former NBA basketball player, spent Christmas in Casa de Campo, La Romana with his family. He said he came to play golf and relax. He arrived on a private flight into the new La Romana International Airport, according to the Listín Diario. Also spending Christmas in the DR was Nicky Lauda, who arrived piloting a 767 of Air Lauda. Sources say Ricky Martin was also seen vacationing in the DR.
Winter Professional Baseball standing (as of 29 December 2000)
 Teams  Played  Won  Lost  Dif.  Pct.
Aguilas(AC)  50  32  18    .640
Estrellas(EO)  50  29  21  3.0  .580
Escogido (E)  49  27  22  4.5  .551
Azucareros(AZ)  50  25  25  7  .500
Pollos (P)  49  19  30  12.5  .388
Licey (L)  50  17  33  15  .340

For baseball game schedule, see http://www.dr1.com/daily/baseball.shtml
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