Proposed bill to charge taxes on items through courier at a value below 200 dollars.

[chicagoan14]

Reforma propone impuesto a los artículos comprados por internet con precio menor a los US$200

El documento considera que existe una competencia desleal para los comerciantes locales, quienes sí deben pagar impuestos por sus mercancías y ven sus precios menos competitivos frente a productos extranjeros

www.diariolibre.com

 

[chicagoan14]

Bonus: Bill proposed to double the cost of vehicle registration sticker: https://www.diariolibre.com/economi...0-a-6000-pesos-en-la-reforma-abinader/2873099

 

[Glenn Burke]

They tried to do it a few times before, let's see what happens this time.

 

[Glenn Burke]

Correct me if I am wrong, but I think it will be a violation of DR-CAFTA agreement, so in a few days or weeks all courier companies will join their forces to fight that in court, as it happened a few times already. Who knows, maybe couriers will lose this time, but I hope they won't.

 

[MariaRubia]

I was going to say, here we go, beat that old donkey again. Then Mrs Abinader says "Oh don't do that I won't be able to buy my Chanel lipsticks" and the bill is dropped. It's only (relatively) rich people who import things using these services, Piantini would go into melt-down if they had to pay tax on their Amazon purchases.

 

[M4kintosh]

Then Mrs Abinader says "Oh don't do that I won't be able to buy my Chanel lipsticks" and the bill is dropped.

Same script the Gov is been doing for the last 5 years.

 

[M4kintosh]

Bonus: Bill proposed to double the cost of vehicle registration sticker: https://www.diariolibre.com/economi...0-a-6000-pesos-en-la-reforma-abinader/2873099

Summary of the Abinader Fiscal Reform:

New taxes for alcohol/tobacco: 11%
IVA instead of ITBIS: new name
Car sticker now 100% more: 3,000 pesos and 6,000 pesos
27% tax for 200,000 monthly income
Property Tax (aka IPI) starting from 5M pesos houses/apartments
All citizens generating 900USD or more per month MUST declare their income: houses, income, assets, saving, bank accounts
No Anticipo for small businesses
All goods, except gasoline/gas, medicines, some foods, will be taxed to 18% sharp
Benefits and grants cuts to Tourism, DR Movie Industry fund, Trust (Fideicomiso), Textiles, Major Industry

 

[M4kintosh]

Summary of the Abinader Fiscal Reform:

New taxes for alcohol/tobacco: 11%
IVA instead of ITBIS: new name
Car sticker now 100% more: 3,000 pesos and 6,000 pesos
27% tax for 200,000 monthly income
Property Tax (aka IPI) starting from 5M pesos houses/apartments
All citizens generating 900USD or more per month MUST declare their income: houses, income, assets, saving, bank accounts
No Anticipo for small businesses
All goods, except gasoline/gas, medicines, some foods, will be taxed to 18% sharp
Benefits and grants cuts to Tourism, DR Movie Industry fund, Trust (Fideicomiso), Textiles, Major Industry

Update:

Summary of the Abinader Fiscal Reform:

New taxes for alcohol/tobacco: 11%
Ecigs and vapes 20% tax
Goods under $200 USD shipped via courier will be taxed 18%
IVA instead of ITBIS: new name
Internet shopping will be taxed to 18%
Car sticker now 100% more: 3,000 pesos and 6,000 pesos
27% tax for 200,000 monthly income
Property Tax (aka IPI) starting from 5M pesos houses/apartments
All citizens generating 900USD or more per month MUST declare their income annually: houses, income, assets, saving, bank accounts
No Anticipo for small businesses
All goods, except gasoline/gas, medicines, some foods, will be taxed to 18% sharp
Benefits and grants to be eliminated to Tourism, DR Movie Industry fund, Trust (Fideicomiso), Textiles, Major Industry
Digital services (Netflix, Airbnb, Spotify, etc) will be taxed 18%
Back to School tax return to be eliminated

Source: https://www.diariolibre.com/economi...eforma-fiscal-que-propone-el-gobierno/2873251

@MariaRubia @Dolores @NALs

 

[MariaRubia]

What worries me is that if something is under the $200 limit, the time it will take to pay the 18% tax. At the moment you order from Amazon and things arrive reasonably quickly. With that tax it's going to slow down the process.

I also wonder how they are going to tax the AirBnBs and how they are going to police the need for people generating US$ 900 a month or more to declare their income annually. And whether that will apply to non-residents, because there are a lot of AirBnB owners who generate that much and live abroad. (and if they don't tax them, there's an obvious loophole for people to exploit)

 

[Glenn Burke]

What worries me is that if something is under the $200 limit, the time it will take to pay the 18% tax. At the moment you order from Amazon and things arrive reasonably quickly. With that tax it's going to slow down the process.

And that will be another violation of DR-CAFTA, because such shipments 1) must be tax free and 2) must go thru customs faster than 24 hours that will be impossible.

 

[Glenn Burke]

And whether that will apply to non-residents, because there are a lot of AirBnB owners who generate that much and live abroad.

When I was selling my apartment in Naco recently, almost every visitor's first question was if the building is AirBnb friendly.

A lot of Dominicans who live in DR are buying real estate as an investment and they count on AirBnb income a lot.

This tax reform will make a lot of people pissed off. I hope PRM will lose next elections.

 

[cavok]

I see a massive logjam in aduanas if they start taxing everything under $200. I buy a lot of items on eBay that only cost $10. It will be a bureaucratic nightmare paying all those taxes and getting the items released from aduanas. The merchants just don't want competition. They also don't have a fraction of the things I want.

 

[JimW]

What worries me is that if something is under the $200 limit, the time it will take to pay the 18% tax. At the moment you order from Amazon and things arrive reasonably quickly. With that tax it's going to slow down the process.

I also wonder how they are going to tax the AirBnBs and how they are going to police the need for people generating US$ 900 a month or more to declare their income annually. And whether that will apply to non-residents, because there are a lot of AirBnB owners who generate that much and live abroad. (and if they don't tax them, there's an obvious loophole for people to exploit)

Re: taxing AirBnB's I think this would be rather easy. This already occurs in many jurisdictions worldwide that tax short term rentals. AirBnB charges the tax during the reservation and remits it to the taxing authority directly. The host never gets involved (obviously if each host collected taxes, many would probably just remain in the hosts' pockets).

So if the DR enacts an xx% tax on short term rentals, that amount would be disclosed and charged when the reservation is made similar to how it does when booking a hotel room through Expedia or the major hotel chain's websites.

Just my guess based on how it works already in AirBnB in other cities and/or countries.

 

[JD Jones]

Also included:

Tax reform proposes applying VAT to digital services such as Netflix, Uber and Spotify
The Dominican Government has included in its proposed Tax Modernization Law, presented this Monday, a change that will subject digital services to the payment of Value Added Tax (VAT). This measure will be brought to the National Congress tomorrow for debate.

According to the Minister of Finance, Jochi Vicente, this new provision is expected to raise RD$6,084 million annually. The tax will affect popular digital platforms such as Netflix, Spotify, Didi, Uber, Airbnb, among others, which currently do not contribute to the treasury under this concept in the country.

The aim of this measure is to broaden the tax base in the digital sector, which has experienced significant growth in recent years, but which until now had not been fiscally regulated in the same way as traditional services. This change has generated concern among users, who could see an increase in the costs of their subscriptions and everyday services due to the implementation of the tax.

The bill is part of a series of measures aimed at strengthening public finances through increased tax collection, but has also sparked debate over the impact it could have on consumers and the country's digital economy.

https://somospueblo.com/reforma-fiscal-propone-aplicar-iva-a-servicios-digitales-como-netflix-uber-y-spotify/

 

[josh2203]

The merchants just don't want competition. They also don't have a fraction of the things I want.

I was just going to write exactly that. The merchants
1. Don't want competition so they can charge a superior price for an inferior product (I have had this happen to me many times)
2. 90 % of the time we have ordered online is mostly because the stuff is not available locally or not close at least. How can you compete with a product you are not even offering?
3. As MariaRubia and cavok pointed out above, the the aduana will start messing with all items, you can say kiss reasonable delivery times goodbye...

It's typical in the DR as seen in many areas, the local businesses are complaining that they cannot compete, but are not ready to do anything that would actually make them able to compete. Business 101: Do things differently or do different things

How about teaching the local merchants to sell also products that are not either c**p in quality or slow in delivery or non-sensical in pricing?

 

[MariaRubia]

Also included:

Tax reform proposes applying VAT to digital services such as Netflix, Uber and Spotify
The Dominican Government has included in its proposed Tax Modernization Law, presented this Monday, a change that will subject digital services to the payment of Value Added Tax (VAT). This measure will be brought to the National Congress tomorrow for debate.

According to the Minister of Finance, Jochi Vicente, this new provision is expected to raise RD$6,084 million annually. The tax will affect popular digital platforms such as Netflix, Spotify, Didi, Uber, Airbnb, among others, which currently do not contribute to the treasury under this concept in the country.

The aim of this measure is to broaden the tax base in the digital sector, which has experienced significant growth in recent years, but which until now had not been fiscally regulated in the same way as traditional services. This change has generated concern among users, who could see an increase in the costs of their subscriptions and everyday services due to the implementation of the tax.

The bill is part of a series of measures aimed at strengthening public finances through increased tax collection, but has also sparked debate over the impact it could have on consumers and the country's digital economy.

https://somospueblo.com/reforma-fiscal-propone-aplicar-iva-a-servicios-digitales-como-netflix-uber-y-spotify/

He stops short of saying how it will work of course. What about a hotel that is selling rooms on AirBnB? If ITBIS has already been charged will they have to charge it again?

And if Uber is having to pay ITBIS then will all the other taxi companies have to charge and pay it? I mean the guys at the rank at the airport and the taxi firms that do long distance work for example?

 

[MariaRubia]

I see a massive logjam in aduanas if they start taxing everything under $200. I buy a lot of items on eBay that only cost $10. It will be a bureaucratic nightmare paying all those taxes and getting the items released from aduanas. The merchants just don't want competition. They also don't have a fraction of the things I want.

Their systems are pretty good to be honest. I think they have the processing power to do this. I guess the shipping companies will be responsible for declaring the value and paying the ITBIS and you will pay it to them when it is delivered to you. Just like now but with an extra tax added. And the shipping companies regularly collect ITBIS for things which cost over 200 so they have processes in place.

 

[MariaRubia]

When I was selling my apartment in Naco recently, almost every visitor's first question was if the building is AirBnb friendly.

A lot of Dominicans who live in DR are buying real estate as an investment and they count on AirBnb income a lot.

This tax reform will make a lot of people pissed off. I hope PRM will lose next elections.

It's been coming for so long. Completely unfair that hotels have to pay ITBIS and Airbnbs don't. And all the richest families are up to their necks in hotels.

In addition to taxing Airbnbs I think there will be a requirement for them to be registered with MITUR and licenced. This has again been a long time coming and the MITUR website has a section for AirBnBs to register for their licence. Complying with the terms will mean inspections. Insurance. That the owner is legally resident here or a Dominican. That will drive a lot of them out of the market.

 

[JD Jones]

Probably the biggest part is individual taxation. 27% if you make more than 200K pesos a month.

I've mentioned before that DGII has the most modern tax collection computerized system in the world.
They are finally getting a grasp on how to use it.

A sacrifice of all, for the good of all​

Santo Domingo. – The recent proposal to reform the Income Tax (ISR) for individuals seeks to address one of the most critical weaknesses of the tax system in the Dominican Republic.

The low taxation faced by individual taxpayers has limited the State's ability to collect revenue, generating a deficit compared to other countries in the region.

Challenges in the taxation of individuals​

The current system presents several problems that hinder the effective collection of taxes from individuals. Among the main challenges, the following stand out:

• Tax Exemptions : Many existing exemptions have reduced the tax burden on higher-income individuals. This situation limits the government's ability to adequately tax those who can contribute the most.
• Inconsistency in Tax Rates : The tax rate for high-income brackets is lower than the rate applicable to businesses. This allows some organizations to plan their taxes in such a way that they benefit from reduced payments, thereby affecting tax equity.
• Lack of Filing Obligation : Many salaried workers do not file tax returns, regardless of their income levels. This lack of obligation creates opportunities for tax avoidance and contributes to low tax collection.

The combination of these factors has led to the fact that the amount collected by individuals in the Dominican Republic is a worrying 10% of total taxes, in contrast to the 24% that this segment represents in OECD countries. This significant difference highlights the urgency of reforming the tax system.

Key proposals for reform​

The Dominican government has presented several proposals to improve the collection of personal income tax. Below are the highlights:

1. New Tax Bracket : The creation of a new bracket in the income scale is proposed for those workers who generate more than RD$2.4 million annually, which is equivalent to RD$200,000 monthly. This new scale will include a rate of 27%, which will only affect 1% of taxpayers, that is, those who are in the highest income levels.
2. Modification of Withholdings : Article 306 bis of the Tax Code will be modified to establish that the withholding on interest is considered as a payment on account. This measure will eliminate paragraph I of the aforementioned article.
3. Elimination of Educational Deductions : It is proposed to eliminate the deduction for educational expenses from Income Tax, stipulated in Law No. 179-09. This action seeks to simplify the tax system and increase the tax base.
4. Obligation to file an annual declaration : The reform also establishes the obligation to file an annual declaration for all employees, with the exception of those whose income does not exceed RD$624,329 per year. This measure seeks to increase fiscal transparency and effective collection.

Perspectives and expectations​

By implementing these reforms, the government hopes to significantly increase tax revenue and improve equity in the distribution of the tax burden.


By raising the rate for higher-income taxpayers and forcing more individuals to declare their income, the aim is to close the gap that exists in the Dominican tax system.

Habrá aumento del Impuesto sobre la Renta a personas físicas

Se espera que las recaudaciones por parte de personas físicas en RD se sitúen en un preocupante 10% del total de impuestos

www.elcaribe.com.do

 

[CristoRey]

Prediction:
PRM increases taxes.
PRM loses next election.
Next political party continues with
said tax increase program, collects
millions and the general population
does see a penny of it.

Until they get rid of the rampid corruption
in government (change a culture) there is zero need to increase taxes regardless of their intentions.