The Listin Diario economic reporter Hector Linares writes that the fiscal limits that the government presented to the IMF as part of the measures taken on to reach an agreement on the Stand By Accord have changed. Originally, the government had proposed a public sector deficit of 2.5% of the GDP for 2004. The most recent revision presented to the IMF raised this figure to 3.75% of the GDP as a result of the assistance given to the banks by the Central Bank, government support of the electric sector and the devaluation of the peso. The first letter of intent stated that the government would try to sustain the deficit at 3.5% of the GDP in 2003, at 2.5% in 2004 and at 1% in 2005. The most recent document speaks of legal difficulties that hamper the activation of certain fiscal measures, together with a less than anticipated internal demand, contributing to a deficit of government income. The letter also admitted that the reacquisition of the two electricity distribution companies and additional assistance to banks brought on new fiscal pressures. While the first letter mentioned that the debt coefficient would reach 35% of the GDP by the end of the decade, the new letter appears to cite a debt coefficient of 40% by 2008. Along with this projection comes a tougher govenment stance with regards to taxes. The proposal, required by proposed bi-lateral agreements as well as the need to substitute temporary tax measures introduced in 2003, will be forwarded to Congress. The government will push for tax measures equal to 2.5% of the GDP, which will come in the form of taxation (0.5% of the GDP) and government cutbacks on spending (2% of the GDP). Among other measures cited were an increase in the VAT taxes, the elimination of tax exemptions on interest earned by corporations with Central Bank certificates and on earnings by the savings and loan associations. Also in the sights of the government are the congressional approval of the 5% tax on exports for a six-month period, a 2% surcharge on imports and an increase on the exit tax at the airports. A total income of more than RD$105 billion is projected for 2004.