President Leonel Fernandez requested that Congress eliminate the tax on corn syrup sweeteners established in the recently ratified Tax Reform Law 288-04. The chief executive sent the request to the Senate in a communique dated 30 September, 2004, in which he also points out his intention of correcting the eventual distortions produced by the law as it now stands, particularly in reference to the proposed Free Trade Agreement with the United States and Central American nations. The President asks Senate leader Andres Bautista to use good sense as country needs "coherence in our commercial relations with respect to the multilateral, bilateral and regional obligations the country has taken on."
Meanwhile, prominent legal scholars are asserting that the ratification of the free trade agreement would automatically nullify the 25% tax on high fructose corn syrup – the apple of discord in these discussions. Noted jurists Eduardo Jorge Prats, Jottin Cury Jr, and Frank Reynaldo Fermin told Diario Libre reporters that they are in agreement that approval of the treaty will negate the tax. Jorge Prats noted that Article 3 of the Dominican Constitution says that international agreements form part of the legal hierarchy from the moment they are signed and ratified by the Dominican Republic. "The best constitutional doctrine maintains that international treaties occupy a rank, if not constitutional at least supra-legislative," he added. Nevertheless, this does not mean that ratification repeals the law, but, rather, that once ratified the treaty terms take precedence over the tax laws. Legal scholar Fermin says that the ratification of the free trade agreement wipes out the tax on HFCS because the treaty supersedes the amendment to the tax law.
The Dominican government has promised to pay the generators US$60 million over the next three months. Yesterday 15-20 hour blackouts were still affecting the country, although in some areas more hours of power were delivered for a slight relief. Energy sector officials Radhames Segura, Ruben Montas and Francisco Mendoza met yesterday with the heads of Ede-Norte, Ede-Sur and Ede-Este (the power distributors), as well as representatives from Itabo, Haina, Monte Rio, Seaboard, Smith-Enron, Cogentrix and Laesa. After the meeting, a government spokesperson said an agreement had been reached by which the government would pay US$60 million to the generators over the next three months in addition to the US$44 million already paid. Segura, who is the executive vice-president of the CDEEE, told reporters from Hoy that the government was trying to obtain US$25 million from the World Bank to help stem the crisis. According to him, the electric situation should start to improve within ten days.
Segura also announced that President Fernandez would reveal the government's plans for the medium and long terms to resolve this greatest of the current crises.
The electricity distributors, known as the EDEs, have furthermore promised to renew their efforts to collect sufficient money from their clients during October, November and December so that the government may hand over the US$20 million to the generators each month.
With the new plans, Segura said he expected generation to ascend to 2,000 MW, sufficient to meet demand. The Dominican Republic has 3,600 MW of installed generation, but, with most of the units shut down, the daily demand cannot be met. Yesterday, generation was a mere 468 MW, while demand represented more than 1500 MW
The Monetary Board authorized the issuance of RD$70 billion in Central Bank investment certificates. These certificates will be offered to financial institutions, institutional investors and the general public. According to the third, fourth, sixth and tenth resolutions of the last meeting of the board, the Central Bank has been authorized to receive deposits in local currency, expand the time frames and reduce the interest rates to be paid. The maximum interest for 2003 certificates, redeemable after one year, will be 34%, down from a previous high of just over 60%. In some cases the certificates may be indexed to foreign currencies and exceed the two lots of certificates auctioned in 2003 by RD$10 billion. The third resolution provided for the issue of RD$10 billion in long-term certificates, with a minimum of RD$50,000 for each one. The interest paid on these will be the national inflation rate plus 3.5% over one year, 4.5% over three years and the inflation rate plus 5% over five years. Interest can be paid on a monthly basis or at the end of the period. The fourth resolution augments the emissions of 3 April and 14 June of 2003 by RD$10 billion, and modifies the interest to be paid. All of the resolutions are contained in double full-page announcements in today's principal newspapers.
The Director General of the Tax Department (DGII) has announced a renewed effort to catch those who avoid paying taxes, particularly the VAT (value-added tax) which is now 16% on 80% of all goods and services in the Dominican Republic. According to Hoy, the director general says that many establishments are charging the VAT but not reporting it to the local Internal Revenue offices. Juan Hernandez Batista, the head of the DGII, said that all of their efforts will be directed at VAT evasion, which he considers to be very widespread. Hernandez said that with the increase in the VAT, there will come a greater propensity of tax dodgers. To combat this process, the director general said his people would start using cross references to reduce what is calculated to be a 30% evasion rate.
The director of the Department of Taxes (DGII), Juan Hernandez highlighted yesterday, are reported in Hoy newspaper, the positive aspects for consumers of recently enacted tax reform. Hernandez pointed out that the new tax code offers breaks for the elderly and increased deductions for the salaried.
Property taxes were eliminated for housing valued at less than RD$5 million, and houses belonging to people over 65 years of age are exempted from the tax altogether. Inheritance taxes were also reduced, and tax on rentals was reduced from 20% to 10%.
He said that owners of dwellings assessed up to RD$5 million are now exempt from paying the luxury tax (IVS). Furthermore, he said that owners that are over 65 years old are exempt from the tax. He also highlighted the substantial reduction in the inheritance tax. He explained in the past, real estate inheritance transactions were taxed at 32%; this was reduced to 3%. Another significant savings will be that the real estate transfer tax is reduced to 3%, down from 4.48%. And he said rentals will now only pay 10% tax, down from 20%.
Juan Hernandez also stresses that thousands will benefit from the higher ceiling for the start of income tax payments on wages. This was raised to RD$20,000 up from RD$16,456. This level is normally adjusted for inflation in January. It is yet to be seen if year's end inflation, which could hover around 35%, will be applied for another increase in the tax exempt level of wages at the start of next year.
The dollar was being sold yesterday for RD$31.25, while the purchase price reached RD$27.50. This is the lowest exchange rate since the weeks immediately after the collapse of Baninter and certainly the lowest peso price of a dollar in 2003 or 2004. Since 16 August, the dollar has fallen from RD$42.35 to RD$31.25, representing over a 25% decrease in cost. Yesterday, more than ever before, the dollar's price was "subject to change" in the principal banks of Santo Domingo. The greatest change was noted in the "buy" price, however. A quick survey of six of the biggest commercial banks showed that the US currency was selling for between RD$31.25 and RD$33.50, while the dollar was being purchased for RD$27.50 and RD$30.00. Some banks started the day buying dollars at RD$31.50 and by that afternoon were offering just RD$28.00. Freddy Ortiz, the head of the remittance companies association, told El Caribe reporters that there was no justification for the exchange rate activity. Augusto Peignand, the head of the money exchangers' association, said that such a low exchange rate is not favorable to certain sectors of the economy and admitted that he was confused by the sudden drop in exchange prices. Some people who were questioned said that the lower exchange rate was a positive sign that some confidence was returning to the Dominican economic environment. Check out http://dr1.com/forums/showthread.php?t=26541 to see what people are changing for today.
The Education Minister will formally bring charges against the former regional director of Education, based in Santiago, Deysi Diaz, for allegedly diverting thousands of school desks, teachers' desks, filing cabinets, cupboards, and blackboards from the public schools. The scam is estimated to have bilked the system of RD$4 million. As reported in the La Informacion newspaper from Santiago, the deputy minister for Education, Fausto Mota, together with Pedro Diep, the new regional director, spoke of finding thousands of desks and other equipment in a warehouse in Don Pedro, a parish of Tamboril, near Santiago. The warehouse belongs to a man named Modesto Diaz, but it is not clear whether he is a relative of Deysi Diaz, the former regional director. Officials discovered 1,355 student desks, 75 cupboards, dozens of filing cabinets, 37 teachers' desks and numerous blackboards. The ministry's legal council will officially file the charges against the former director as well as several others. Diep told reporters that the discovery has led to indications there school furniture could be stored at other warehouses in Santiago.
A well-known educator himself, Diep was very cautious as he spoke to reporters about the events that led to the discovery. He praised the efforts of former Education Minister Milagros Ortiz Bosch, but also revealed that although she had ordered an inventory of all the belongings of the ministry under her charge, these pieces of equipment were left out, and Deysi Diaz was responsible for the ministry's property. El Caribe was not as circumspect, titling their report "Mafia diverted equipment needed by schools" and referring to the clandestine storage of over 3,000 school desks.
School District 04 of Santiago requires 800 student desks. Rafael Perez, the district supervisor, is always flooded with requests for desks, but he has not had any to distribute so far.
More than 100 families bought apartments and houses from the National Housing Institute (INVI) during the last administration, but have not been able to occupy their properties because INVI employees had sold the same properties to several people. Others, who had paid their bills, appear in the computer as owing money because they were given phony receipts. The former director if the INVI, Juan Vargas, refused to talk to reporters about the scandal that has rocked the institution charged with providing affordable housing for the people, limiting himself to admitting he had fired some employees for improper activities. According to the latest information from sources close to the scene, when people arrived at INVI offices to pay their monthly quotas, they were told that " the system was down" and then given handwritten receipts that were never entered into the computers. There is an INVI file that contains the paperwork of 20 journalists who were able to get apartments one way or another but still have not been able to access their new living quarters.
The District Attorney for the National District, Jose Manuel Hernandez Peguero, announced the arrest of one suspect in the attempted homicide of television and radio commentator Euri Cabral on Wednesday night. Hoy newspaper reports that the DA is not revealing the name of the person being questioned, but that he did say that the case is not an isolated incident. Peguero said that the Cabral incident bears stark similarities to a declaration made last week by well-known lawyer Ramon Antonio "Negro" Veras, who said that military and police officials were plotting against well-known personalities, including himself. Police Chief Manuel de Jesus Perez Sanchez ordered special protection for Cabral and other commentators of the popular radio program "El gobierno de la manana," of whom only two have accepted the offer and whose names were not revealed. Yesterday, a special commission was formed to lead the investigation into the incident in which approximately ten shots were fired at Cabral's SUV as he and various passengers drove down a Santo Domingo street. The commission is headed by DR Attorney General Francisco Dominguez Brito and includes District Attorney Hernandez Peguero, Police Chief Perez Sanchez, the head of criminal investigations General Bernardo Santiago y Santiago, and the chief of the intelligence division of the Armed Forces, Major General Rafael Ramirez Ferreira. Sources are telling reporters from Hoy that there is a lot of scrutiny being given to the car that was driving ahead of Cabral's Honda SUV. The other people under investigation are possible eye witnesses who may be able to supply more information to the police.
The alligator that was found in the river near Pedro Brand in the Province of Santo Domingo was delivered safely to the hands of the Ministry of Environment and taken to the National Zoo. The authorities did not have an easy time getting the amphibian from its captors. Ivelisse Figueroa, the director of the unit that supervises and inspects environmental issues, said that the people were very aggressive. She had to tell them that where they were keeping the alligator was not its natural habitat and that it was very dangerous for the children. The people wanted money, according to the report in the El Caribe. A team of three specialists from the wildlife and biodiversity department of the ministry went to the barrio El Carton in Pedro Brand to rescue the "caiman." The technicians who performed the rescue also searched the area around the upper middle class residential area known as Lomas Lindas, but did not find any more alligators. A young girl told them, however, that she had seen two of the creatures previously, but that they were no longer there.
Roll out the red carpet. The official arrival in the DR of gold-medal Olympian Felix Sanchez is expected at 12:30pm this Sunday, 3 October. He will be received by his father and a committee of sports figures including the Sports Minister Jay Payano and the president of the Dominican Olympic Committee, Luisin Mejia, as well as officials of the Dominican Track and Field Federation. Children bearing flowers and seven bands playing along George Washington Avenue (the Malecon) are part of the planned tributes. A special "Felixmobile" will be used to parade the first Dominican to garner an Olympic gold medal up and down the main streets of Santo Domingo. A total of 60 OMSA buses will be used to transport people to the parade route and Payano has called for a huge public expression of support the superstar athlete. Among the musicians expected to perform are Sergio Vargas, El Jeffrey, Kinito Mendez and many more.
While some of our favorite teams might not be doing as well as hoped, there is certainly a flood of outstanding individual performances from the Dominican baseball contingent in the US Major Leagues. Forty-six-year-old Julio Franco is having a great year with the playoff-bound Atlanta Braves and is just three hits away from becoming the oldest player ever to get 100 hits in a year. The now-banned Pete Rose got 107 hits when he was 44 years and 145 days old, but Franco is already the oldest player ever to have a pinch hit homerun and also the oldest ever to hit a grand slam homerun. Then there is the very famous A-Rod, Alex Rodriguez, who is just one of three players to hit 35 homeruns and score 100 runs over seven straight seasons. Alex joinng Jimmy Foxx (9 times) and Babe Ruth (7 times) in that category. A-Rod has maintained these numbers for 9 seasons in a row, but he is chasing the great Hank Aaron, who did it 13 times between 1955 and 1967. Vladimir Guerrero, trying to go from the worst team in baseball (Montreal Expos) to the playoffs with the Anaheim Angels, has posted some impressive numbers, setting a team record for runs scored and becoming only the second player in the team's history to have both 120 runs scored and 120 runs batted in. Albert Pujols, the star third-baseman for the St Louis Cardinals, and a leading candidate for the MVP award in the National League, joined Hall of Famers Ted Williams and Joe Dimaggio as the only players in baseball history to drive in 500 runs in their first four seasons of Major League play. Pujols is the fourth player to have 100 RBIs in the first four seasons of play. He already has 388 total bases this year, while only three other Cardinals have ever reached 400 in the long history of the team. Miguel Tejada, who went from the Oakland As to the Baltimore Orioles in the off-season, established a team record for RBIs by beating Rafael Palmiero's 142 obtained back in 1996. He is also the player with the highest current consecutive game streak at 780, the longest stretch since Cal Ripkin Jr. And, finally, pitcher Bartolo Colon is one of four pitchers to win 16 games in his first year with the Anaheim Angels, joining Hall of Famer Nolan Ryan, Bill Singer, and Bert Blyleven.
Along with Greg Maddux, Colon is the only Major League pitcher currently active with 14 or more wins over the past 7 seasons.
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