DR1 Daily News - Dominican Republic

Economist Miguel Collado Di Franco writes in Diario Libre that high taxes and the complexity in filing is the main obstacle to the formalizing of small business. The finding is confirmed in surveys carried out by the Central Bank and the Ministry of Industry & Commerce.

While large businesses in the Dominican Republic enjoy major tax reduction schemes, such as free zones and the tourism sector, small businesses are penalized with the regular tax schemes conceived for all businesses.

Collado says this reality is behind the low rate of formalization of small businesses that prefer to stay outside of the tax radars, keeping low profiles. Surveys indicate that 85% of small businesses are informal operations, or about 404,000 entities.

Collado says that in addition to the tax burden, the companies also cringe under the burden of high electricity costs. The red tape required to get...