How strictly are businesses monitored?

InsanelyOne

Bronze
Oct 21, 2008
895
28
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I was at the gym the other day and was noticing how the owner of the gym doesn't appear to keep any sort of records. Several people paid membership fees and the money was just pocketed. Now it could very well be the owner does in fact keep good records but I'm just basing this on my casual observations.

It got me wondering about how strictly businesses are monitored by the appropriate authorities. I presume the proprietor is supposed to be paying taxes on the membership fees. Who monitors it? Who enforces it? The same goes for all of the rental properties. Do people honestly report all of their rental earnings and pay taxes? What about all the colmados (sp?) ... do those people report and pay taxes?

I've always figured it's pretty much the Wild West here but thought I'd ask.
 

Castellamonte

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Mar 3, 2005
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For cash transactions as you mentioned above, it's not a lot different than it is in any other part of the world. If you don't report it then the taxing authorities are unlikely to know unless you have obvious expenses in excess of reported income sources.

That said, as CC alluded, very few cash type businesses I know of are assiduous in their record keeping. The more accurate the records the more taxes you pay. It's the same everywhere.
 

dv8

Gold
Sep 27, 2006
31,266
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two words: double booking.

dominicans remind me of my ex-boss in england who thought paying taxes was some sort of elaborate hoax :)
 

Castle

Silver
Sep 1, 2012
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Yes I did need to ask... and yes I expect a serious answer. It was an honest question. As I said, I know this place is the Wild West but I'm always open to the idea that there are exceptions to the rule.

Small business as a gym can easily get by under the radar. Customers, of course, should ask for a receipt (cash or no cash), this receipt should also be "con valor fiscal". Unfortunately, dominicans don't regularly ask for receipts. If a receipt is issued and you can use it in your taxes declarations, the gym must better start declaring taxes or they'll be shutdown. It's not so uncommon to see a business be shut down by the DGII (Internal Revenues). Maybe folks at the DGII are a bunch of thieves, but they won't allow any other tax thieves in town.
 

windeguy

Platinum
Jul 10, 2004
42,211
5,966
113
DR is going cashless - keep that in mind

According to our resident "in the know connection" to all things PLD, the DR is going cashless. That means in the imminent future all transactions will be done using a cashless method such as credit/debit cards and their associated card readers. At that point it will be harder, shall I dare say impossible, to have a cash business that avoids paying taxes.

(My definition of imminent future is sometime during the life of your as yet unborn children's children. Around the same time as the electricity problems are worked out and the politicians stop buying Jeepetas for themselves with the peoples money.)
 

william webster

Platinum
Jan 16, 2009
30,247
4,329
113
Oh , Windy.... don't be so hard on the DR.

The US Gov't has been talking about 'going paperless' for welfare payments since 1990 or so.
Do you think it has happened? Not a chance.

Going 'paperless' and/or 'cashless' necessitates the recipient / consumer having a bank account.

How ludicrous is it for the US Gov't to expect that the lowest totem on the pole (the welfare echelon of society) will be bankable ??
What bank will take a customer who has no deposit?
Those welfare people take that check monthly for cash.

I was a check casher... every check casher has regular customers.
One of ours came in - check in hand - for cashing. It was $900+/monthly

The girls would ask him how he wanted - Any large , sir?
Sure.... I'll take some 20's, was the invariable answer.
Another old lady had a system whereby she carried a stash/mix of denominations so that she could pay for any deliveries by sliding the bills under the door - she didn't like to open it.

You learn alot about people when you handle their money.

A bit of a digression.... but a cashless RD might be quite ways off.
 

Ken

Platinum
Jan 1, 2002
13,884
495
83
According to our resident "in the know connection" to all things PLD, the DR is going cashless.

The country is already "cashless" or nearly so. It doesn't have the cash to pay many of its bills.
 

belgiank

Silver
Jun 13, 2009
3,251
103
0
Well, the DR going cashless would be kind of suicidal, wouldn't it? With all the fraud with the cards. And the fact that some restaurants and other businesses up their price with up to 20% if you pay with a card.

Mind you, 100% in favor of better monitoring. If I have to pay the tax to the business, I expect the business to pay it to the government.

The way the IRS did it in Belgium was to monitor similar businesses in the same neighborhood. Say you had 3 hairdressers in the same district, and one reported significantly less revenue, they would check him out. They would also monitor your purchases. For example the amount of shampoo bought by the hairdresser, and compare that to the sales he reported.

Of course that is not foolproof, but combine that with surprise visits, and random checks on products and invoices, and it becomes quite hard, and dangerous to cheat.

Maybe an idea for here. I still remember being told by a chef of a famous restaurant here, he got paid 25,000 rds officially, and about 75,000 rds on the side, plus a percentage of the profits, so he did not have to pay taxes. I just mean, if the tax services here would be serious, they would know that a chef in a restaurant like that would make a hell of a lot more than 25,000 rds.

BelgianK
 

Castellamonte

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Mar 3, 2005
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... I still remember being told by a chef of a famous restaurant here, he got paid 25,000 rds officially, and about 75,000 rds on the side, plus a percentage of the profits, so he did not have to pay taxes. I just mean, if the tax services here would be serious, they would know that a chef in a restaurant like that would make a hell of a lot more than 25,000 rds. BelgianK

Another "reason" to pay employees as the above is to circumvent the severance pay rules. If you officially receive RD$25k and get fired/quit you cannot obtain the severance as if it were based on what you really were paid...only what can be proven. Possibly this is why he was paid this way as well...
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
936
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Another "reason" to pay employees as the above is to circumvent the severance pay rules. If you officially receive RD$25k and get fired/quit you cannot obtain the severance as if it were based on what you really were paid...only what can be proven. Possibly this is why he was paid this way as well...
PLUS there are onerous payroll taxes to pay above RD$23,000...
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
13,280
893
113
Santiago de Los 30 Caballeros
Another "reason" to pay employees as the above is to circumvent the severance pay rules. If you officially receive RD$25k and get fired/quit you cannot obtain the severance as if it were based on what you really were paid...only what can be proven. Possibly this is why he was paid this way as well...


I see expats are "getting to KNOW the real wages/economy" of the DR and not the one in "paper"...

A good thing!

I laugh every time somebody tries to argue that the majority of Dominicans live off from the reported low wages in paper!
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
13,280
893
113
Santiago de Los 30 Caballeros
Well, the DR going cashless would be kind of suicidal, wouldn't it? With all the fraud with the cards. And the fact that some restaurants and other businesses up their price with up to 20% if you pay with a card.


BelgianK


That's why it's taking so long to roll out! Before the first sector goes cashless, the system has to be made congruently more secured for all transactions. Enter the chip cards and challenge tokens... Enter Biometric Cedulas with multilevel encryption. Enter mandatory fiscal journal printers for all biz. Etc...

The banks get the first treatment under the program... Already underway!
Adding extra fees for card based transactions will be banned as it operates today!
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
13,280
893
113
Santiago de Los 30 Caballeros
Oh , Windy.... don't be so hard on the DR.

The US Gov't has been talking about 'going paperless' for welfare payments since 1990 or so.
Do you think it has happened? Not a chance.

Going 'paperless' and/or 'cashless' necessitates the recipient / consumer having a bank account.

How ludicrous is it for the US Gov't to expect that the lowest totem on the pole (the welfare echelon of society) will be bankable ??
What bank will take a customer who has no deposit?
Those welfare people take that check monthly for cash.

I was a check casher... every check casher has regular customers.
One of ours came in - check in hand - for cashing. It was $900+/monthly

The girls would ask him how he wanted - Any large , sir?
Sure.... I'll take some 20's, was the invariable answer.
Another old lady had a system whereby she carried a stash/mix of denominations so that she could pay for any deliveries by sliding the bills under the door - she didn't like to open it.

You learn alot about people when you handle their money.

A bit of a digression.... but a cashless RD might be quite ways off.

I got news for you:

The food stamp program no longer issues paper based money to people, they get the EBT card, which in itself is a bank end generated account for that particular client.

They put both cash and food stamp benefits on the same card account, but depending on which they use or need, the users are able to either pay at the counter with the stamps portion or the cash as a debit card. They can also access the cash benefits from any ATM. For a while now, payments for rent have been carried out by direct deposit to the home owners/RE principals and not provided directly to the beneficiaries.

The same in the DR with the BonoLuz, BonoGas and food benefits cards...

It's happening much faster than you care to notice!


EBT-Cards.jpg
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
13,280
893
113
Santiago de Los 30 Caballeros
Maybe an idea for here. I still remember being told by a chef of a famous restaurant here, he got paid 25,000 rds officially, and about 75,000 rds on the side, plus a percentage of the profits, so he did not have to pay taxes. I just mean, if the tax services here would be serious, they would know that a chef in a restaurant like that would make a hell of a lot more than 25,000 rds.

BelgianK

That's exactly how it goes down here in the DR... Both ends are in cahoots due to the immediate benefits of such illegal pact.

I do it in my DR biz, and pretty much big and small biz do it too. Some even got to extreme lengths to make it appear legal as in bonuses for reaching flat out under-productive goals.
 

beeza

Silver
Nov 2, 2006
3,480
732
113
The DR is already cashless. It's just that instead of using plastic cards, they use individual chewing gums and boiled sweets. It's obviously legal tender in many shops!