DR1 16 May 2007:
Ortega proposes a flat tax
Economist, negotiator and ambassador to Colombia Julio Ortega Tous has called for a simplification of the local tax structure and suggested a flat 10% tax on all imports, a 10% tax on incomes and a 10% VAT tax on everything, with no exclusions. This follows a similar proposal by US economist Victor Canto, who was one of late former President Ronald Reagan's economic advisors, and years ago by Frederic Emam Zade, today director of the Funglode think tank in Santo Domingo. Ortega Tous cited what is happening in the tobacco sector, where cigarette manufacturers are halting local production and importing product for the local market. "What is worse" according to Ortega, "is the risk of contraband and counterfeiting." Ortega used Ireland, a country that was one of the poorest in Europe 17 years ago, as his example. By simplifying the fiscal structure, Ireland has become a magnet for investors and is now one of the richest countries in Europe. In the past, income tax in Ireland could be as high as 76%, but today it is just 15%. Ortega pointed out that he was not looking to reduce the government's income levels but to simplify the system in order to guarantee current levels or even an increase of income. According to Ortega, the IMF does not see things the same way, and has not realized what has happened in the tobacco and alcoholic beverage sectors where the highest taxes have produced a decrease in collections.
Four years ago, in August 2003, Frederic Emam Zade had proposed:
http://dr1.com/news/2003/dnews082103.shtml#5
Emam Zade sees opportunity in crisis
Writing today in El Caribe, economist Frederic Emam Zade says that Dominicans can make the most of the present crisis if costs are minimized and benefits maximized. He explains that while it is too late to reverse the chaos of the past three years of unwise economic policies, some good may come of it. He mentions that the recent disorder has cut the value of the Dominican peso in half, ?but that effect has eclipsed the fact that the devaluation doubled the number of pesos per dollar and transferred RD$325 billion to two million Dominicans that have or generate dollars.? He says that this redistribution of wealth is the way the invisible hand of the market is guiding us so we can take advantage of the chaos.
He writes that a new government should instate a program to promote our exports, thereby exorcising the anti-exporter slant of our system, eliminating the distortions and differences between free zones and the rest of our economy, and turning the entire territory into one great free zone, with taxes charged to all, but at lower-than-present rates.
?We could apply a formula of 10-10-10,? he says, explaining that this would mean a 10% tax on net income of all companies and individuals without exception, 10% ITBIS on all goods and services without exception, and 10% on finished imported goods. To consolidate the relaunch of our exports of tourism services, we could discount 90% of the ITBIS for six months to all hotels, restaurants and suppliers of goods and services.
Emam Zade goes one step further, in saying that to really attract more remittances and lure back the capital and new investments, he would expel the traditional anti-capitalist devils and eliminate taxes on capital in the form of interests, dividends, capital gain, transfers between generations for inheritances and all donations.
Emam Zade even goes as far as to focus on the development of a true business stock exchange. He said to stimulate a true stock exchange, the new government could exonerate companies that sell more than 90% of their shares to at least 10,000 shareholders from paying income taxes for a non-renewable period of 10 years.
Emam Zade is the director for economic development of the Fundacion Global Democracia y Desarrollo, the think tank center under former President Leonel Fernandez.
Ortega proposes a flat tax
Economist, negotiator and ambassador to Colombia Julio Ortega Tous has called for a simplification of the local tax structure and suggested a flat 10% tax on all imports, a 10% tax on incomes and a 10% VAT tax on everything, with no exclusions. This follows a similar proposal by US economist Victor Canto, who was one of late former President Ronald Reagan's economic advisors, and years ago by Frederic Emam Zade, today director of the Funglode think tank in Santo Domingo. Ortega Tous cited what is happening in the tobacco sector, where cigarette manufacturers are halting local production and importing product for the local market. "What is worse" according to Ortega, "is the risk of contraband and counterfeiting." Ortega used Ireland, a country that was one of the poorest in Europe 17 years ago, as his example. By simplifying the fiscal structure, Ireland has become a magnet for investors and is now one of the richest countries in Europe. In the past, income tax in Ireland could be as high as 76%, but today it is just 15%. Ortega pointed out that he was not looking to reduce the government's income levels but to simplify the system in order to guarantee current levels or even an increase of income. According to Ortega, the IMF does not see things the same way, and has not realized what has happened in the tobacco and alcoholic beverage sectors where the highest taxes have produced a decrease in collections.
Four years ago, in August 2003, Frederic Emam Zade had proposed:
http://dr1.com/news/2003/dnews082103.shtml#5
Emam Zade sees opportunity in crisis
Writing today in El Caribe, economist Frederic Emam Zade says that Dominicans can make the most of the present crisis if costs are minimized and benefits maximized. He explains that while it is too late to reverse the chaos of the past three years of unwise economic policies, some good may come of it. He mentions that the recent disorder has cut the value of the Dominican peso in half, ?but that effect has eclipsed the fact that the devaluation doubled the number of pesos per dollar and transferred RD$325 billion to two million Dominicans that have or generate dollars.? He says that this redistribution of wealth is the way the invisible hand of the market is guiding us so we can take advantage of the chaos.
He writes that a new government should instate a program to promote our exports, thereby exorcising the anti-exporter slant of our system, eliminating the distortions and differences between free zones and the rest of our economy, and turning the entire territory into one great free zone, with taxes charged to all, but at lower-than-present rates.
?We could apply a formula of 10-10-10,? he says, explaining that this would mean a 10% tax on net income of all companies and individuals without exception, 10% ITBIS on all goods and services without exception, and 10% on finished imported goods. To consolidate the relaunch of our exports of tourism services, we could discount 90% of the ITBIS for six months to all hotels, restaurants and suppliers of goods and services.
Emam Zade goes one step further, in saying that to really attract more remittances and lure back the capital and new investments, he would expel the traditional anti-capitalist devils and eliminate taxes on capital in the form of interests, dividends, capital gain, transfers between generations for inheritances and all donations.
Emam Zade even goes as far as to focus on the development of a true business stock exchange. He said to stimulate a true stock exchange, the new government could exonerate companies that sell more than 90% of their shares to at least 10,000 shareholders from paying income taxes for a non-renewable period of 10 years.
Emam Zade is the director for economic development of the Fundacion Global Democracia y Desarrollo, the think tank center under former President Leonel Fernandez.