The Dominican Federation of Merchants (FDC) disputes the rationality of taxing income that the government knows business will not receive. Ivan de Jesus García, president of the organization, says that there is a major distortion in the tax law where it establishes that businesses have to pay the 12% ITBIS tax on the full amount of a purchase even when businesses receive only 96% when the latter is made with credit cards. He said that 70% of all purchases made at supermarkets are credit card purchases. Likewise, he says that the government is levying the 1.5% tax on gross sales on full value of credit card purchases, despite businesses only receiving the discounted amount. Recently, CPA Crispulo Perez denounced in Hoy the problem. Businesses that mostly sell on credit are finding they have to pay the 12% ITBIS and the 1.5% tax in advance. García says this is hurting business cash flow and could lead many companies to close.
