As a result of what President Leonel Fernandez described as an unusual "collective intelligence" exercise, the statesman revoked several of the tax increases he had proposed in November and announced that he would be sending a proposal with a greater focus on cutting superfluous government spending and increasing tax collection efficiency to Congress. The original proposal presented to the nation on 14 November had met with widespread rejection and an almost unanimous call for the government to cut its own spending. The President reversed his original decision to impose a 16% ITBIS (VAT) rate on sugar, oil, coffee, butter or milk and eliminate this year's reduction of income tax. The President's new counterproposal includes taxing gaming, betting, alcohol and tobacco products, and increasing the tax on license plate renewals. The President also revoked the proposed additional 5% tax on hotel rooms and an increase in the IVSS tax on property, but announced that the government would seek increased transparency in payment of taxes on all-inclusive vacation packages. The government also seeks to increase the number of taxpayers by introducing greater penalties for evading payment, as well as a simple ITBIS (VAT) plan to get more small businesses to pay taxes.
In addition, Fernandez announced his nine-point plan for cutting government spending. He announced salary cuts for government officers, a ban on government and decentralized government institution financing plans for the purchase of vehicles and vehicle exonerations. The pay cut consists of a 10% cut on salaries of RD$125,000 and upwards, a 5% cut on those making RD$100,000 and a 3% cut for government employees who earn more than RD$50,000. He also accepted to limit Dominican government delegations traveling abroad to five members, and to control cell phone use and expense accounts for government officials.
The President announced in the speech last night that his office seeks a RD$254.68 billion budget. Of that sum, RD$209.77 billion will come from taxes and RD$46.24 billion will come from financing. The budget is broken down as follows: RD$65.37 billion will go towards paying the public debt, RD$42.07 billion towards paying salaries, RD$31.44 billion for goods and services, RD$65.19 billion towards transfers and subsidies, and RD$50.99 billion on capital expenditures.
The tax reform and budget is being sent to Congress for approval today.
Though revenue was lower than the government had estimated, the hefty increase in government spending is mentioned as the main reason for the present government deficit. Diario Libre points out today that even if revenues had been as expected, a RD$5 billion deficit would have been reported given the free hand in government spending this year, especially due to the congressional and municipal election that took place in May. A report by the Central Bank points out that for the period of January-September the government collected RD$135.43 billion, but it had estimated collections of RD$140.65 billion, accounting for the RD$5 billion deficit. During that same period however, the government spent RD$146.03 billion, a difference of RD$10.6 billion.
Although the President announced that basic food items would not be taxed, following meetings last week at the Presidential Palace promising that prices would be controlled, business leaders cannot explain why basic food prices are still extremely high. Prices got a jump start in mid November after the President had announced basic food would be levied the ITBIS tax.
A survey by Diario Libre reports that several colmados, supermarkets and stores revealed that eggs, butter, oils, sugar, beans, cod and chicken broth still remained extremely expensive. Administrative Minister of the Presidency Luis Manuel Bonetti, who last week claimed that the price hikes were due to fear and uncertainty caused by the announcement of the fiscal reform, assured the public that they would help normalize the situation, but have since been quoted in Diario Libre as saying that reductions in processed products are out of their control. Antonio Parra of the National Council for Provisions Businesses said that last week's agreement was to reduce things like garlic, beans, onions, potatoes and rice as long as they were allowed to import those goods. Parra did say that the price of eggs would be stabilizing this week. Yovanny Leyba of the National Federation of Business retailers maintained his position, saying that there is no reason for prices to be high.
The French government has given the RD$30 million for projects aimed at strengthening municipalities, hospitals, community service, and support for women's development programs in Elias Pina province. Cecile Pozzo di Borgo, the French Ambassador to the DR, made the announcement. The aid will be distributed through the French Development Agency's Cooperation Service. The French government disburses its aid to Latin American countries through this organization.
A letter from the US Embassy's press attache William J. Millman published in Hoy seeks to clarify US Ambassador Hans Hertell's statements about the nationality of Haitians born in the country. The letter says that Hertell understands Dominican laws on the status of foreigners born in the DR and that the US government recognizes the country's sovereignty, but adds that foreigners born in the country should receive an official certificate recognizing their births here. In the statement, Millman clarifies Hertell's point and challenges writer Mario Alvarez Dugan, who wrote what he calls "an incorrect" op-ed piece on the subject in the newspaper titled "and what does the Empire want?" Hertell, speaking at a luncheon held by El Caribe newspaper, defended himself and said that at no time was he referring to Haitian nationality. He says that he was simply alluding to the problems the US embassy has had in trying to verify births of foreigners in the Dominican Republic, which is a problem other embassies have also experienced.
The Dominican Telecommunications Institute (Indotel) inaugurated four computer centers in Montellano and Altamira yesterday with 50 Internet-ready computers. This is the sixth center Indotel has opened in Puerto Plata province this year.
PRD party spokesman Christian Paredes has said that President Leonel Fernandez is in no position to negotiate agreements on taxes and compared him to street vendor, saying that he is like a person who asks you for RD$1,000 for a product and ends up selling it to you for RD$100. Paredes, quoted in El Caribe newspaper, was referring to the recent agreement between the government and Verizon Dominican which allows Verizon to pay US$170 million in capital gains tax instead of the US$500 million that the government originally asked for. Paredes said that the taxes that Verizon had to pay weren't being demanded by Fernandez or the Tax Department, but by the Dominican public.
The company contracted for the automating of civil and electoral registry is again in the forefront. Antonio Lockward Artiles, recently fired secretary of the Central Electoral Board (JCE) has taken what he knows on Soluciones Modernas (SOMO) deal to the Department for the Prevention of Corruption (Depreco). Lockward claims that he was dismissed from his post at the JCE as a way of keeping him quiet, but said that this wouldn't work. Lockward accuses Roberto Rosario, the newly appointed president of the Administrative Chamber of the JCE, of being behind the signing of the now controversial contract with SOMO and says that he has chosen this moment to come out in the press because it is his last resort in trying to get the information out. Lockward is quoted in Hoy newspaper as saying that Rosario was the most corrupt of all the former JCE judges and said that putting the investigation of the SOMO contract in his hands was "like putting the Church into the hands of Lucifer," as quoted in Hoy newspaper. Lockward said that he would ask new JCE president Julio Cesar Castanos Guzman to hear his version of the story, which according to him, has fallen upon deaf ears until now. Lockward told Diario Libre that he hopes that he is not dealt with in the same way the Sicilian mob deals with people who know too much, and admits to carrying a weapon for personal safety.
The SOMO contract has been under investigation since February this year, with an audit being conducted on the contract for the purchase of RD$2 billion in equipment to modernize the JCE. The contract would provide electronic registration of births, deaths and marriages as well as voter registration, plus 14,000 electronic voting machines for the 2008 Presidential election. The audit was hotly contested by the previous JCE members and bidding for the contracts was also disputed.
Listin Diario is reporting an increase in fake currency circulating in the Santiago area. The counterfeit bills are so effective that the special machines used to determine whether money is fake or not cannot tell the difference. Counterfeiters in the region have put thousands of pesos worth of false money into circulation, mostly in denominations of RD$1,000 and RD$2,000. Diario Libre reports that music promoter Joselito "Perla Negra" was conned out of RD$13,000 for tickets to an Anthony Santos concert. The fake RD$2,000 notes have the serial code LU3837043 while the RD$1,000 notes begin with the code AR.
Middle and lower class Dominicans are not in agreement with the idea of such extreme measures when it comes to punishing energy thieves. A poll conducted by Diario Libre shows that many feel that there should not be sanctions against people who steal energy because a large portion of the population pays such high prices for a bad service. The poll showed that many Dominicans feel that this measure would only affect the poorer sectors of society because people with economic resources would not be penalized. Energy Superintendent Francisco Mendez countered these arguments by saying that anyone, rich or poor, who steals will be punished. Mendez is quoted in Hoy, saying that people don't steal energy and then walk around as if they haven't done anything wrong in any other country in the world. Mendez said that the only way to have a quality energy system is for everyone to pay for the energy they consume. These concerns are in response to a proposal that was submitted to the President by the State Electric Companies (CDEEE), which calls for stiff penalties and even jail for anyone caught stealing power. The proposal has been reviewed by a special Presidential commission and would grant discretionary powers to the local electricity distribution companies (the EDEs) to determine whether fraud exists, but it does not have any consumer protection mechanisms. The proposal would punish tampering with electric meters, using electronic devices or making direct connections to the system. Even "attempting to commit fraud" is punishable in the proposal. The maximum penalty could be up to five years in jail.
The Department for Drug Control (DNCD) reports that a total of 45 "mules" have been arrested for drug trafficking in the last three months. Listin Diario reports that 21 foreigners between the ages of 19 and 22 were caught. The mules used various methods to transport the drugs including transporting them internally or hidden in clothing, in the lining of suitcases or in ceramic pieces. In more legal news, 55 Dominicans will be returning to the DR, 40 of whom were being held in the US on murder charges. The Dominicans had served sentences of between 10 to 18 years and will be taken to the National Police headquarters by bus before being released. Listin Diario reports that the US government deports between 50 and 60 criminals who have finished their sentences each month. The deportation of criminals back to the DR is part of an immigration agreement that was signed in 1910.
Braulio Medina Artiles and Jeyson Terrero have both been sentenced to one year in jail for their part in the brutal murder of Luis Fernando Rodriguez Montan. Bail has been set at RD$200,000 for mechanic Elio Mejia Ortiz for his part in the crime. Prosecutor Perfecto Acosta says that he is waiting for Ivan Samuel, who was injured during a raid and is being treated for his wounds at the Dario Contreras Hospital, to be released so that he can face trial. The 69-year old victim was kidnapped and murdered, and his body burned and dismembered by a group of five men. Two gang members, Milciades Matos (Tango) and Jesus Robinson, both with long rap sheets, were shot and killed by police during a raid that led to the capture of the other men.
The trendy disco Praia Bar and Wine Lounge SA is to re-open after being closed since 17 September of this year. The popular nightclub was closed after college student Pura Alexander Nunez Ramirez was shot and killed by one of the club's security guards. The club had not been closed as a result of the young woman's death, but because of allegations that the club had practiced discrimination against her boyfriend, in an incident that caused the conflict that led to her death.
The Pro-Tourism Development Committee and Conservation of Miches' Resources (Conatura-Miches) is confident that the RD$7 billion being spent on infrastructural investments in Miches will help improve the lives of the people in the area. Adri Garrido of Conatura-Miches, speaking in Diario Libre, says that the investment will create jobs with the development of tourism.
Things are looking mighty good for the Gigantes as they have now classified for the playoffs in the Dominican Winter League. The Gigantes are coming off of a 14 game winning streak over the last two weeks, and despite being snapped by the Aguilas on Sunday, they are still sitting comfortably atop the leader board with a two-game lead over Licey. Last night the Aguilas stayed in the running with a 10-5 pounding of the Leones.
Standings
| Team | W-L | Avg. | Games Behind |
| Gigantes | 25 - 12 | .676 | -- |
| Licey | 23 - 14 | .622 | 2.0 |
| Aguilas | 23 - 14 | .622 | 2.0 |
| Estrellas | 18 - 19 | .486 | 7.0 |
| Leones | 11 - 26 | .297 | 14.0 |
| Azucareros | 11 - 26 | .297 | 14.0 |
* Estadio Quisqueya 7:30
Gigantes vs. Licey
* Estadio Cibao 8:00
Estrellas vs. Aguilas
* Estadio Francisco Michell 7:30
Escogido vs. Azucareros
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