As was predicted by many observers of the political and economical scene, the first public hearings on the new tax proposals prompted a great number of different opinions. The Diario Libre reported that a total of 57 separate amendments to the proposal were put forth during the first day?s hearing. El Caribe says there was strong opposition to the VAT increase – from 12% to 16%- among the 40 business, union, political and consumer groups that presented counterproposals to the Chamber of Deputies Finance Commission. While none of the newspapers gave a specific list of the proposals, Diario Libre did report that Technical Secretary of the Presidency Carlos Despradel told the commission that any delay in the fiscal package?s approval could jeopardize the relief granted by the Paris Club and potentially endanger the much-needed US$100 million in financing to pay the DR?s obligations to the Paris Club. This financing will become available only if the tax reform is passed beforehand and the IMF standby agreement is in place. Because the Dominican Republic cannot use the funds that have been freed up by the Paris Club to pay its international debts, the country is obliged to find new financing for these payments.
The country, according to today?s El Caribe, must re-establish the program initially signed with the IMF, since the local economy and society in general ?cannot bear? more debates on the IMF topic. Any delays would force the country to pay the US$193 million owed to the Paris Club members. This is why Apolinar Veloz, one of the Central Bank?s top officials, is urging a new monetary strategy. In contrast to the first quarter, the Central Bank did not reach its monetary targets for the second quarter, which were stipulated by the IMF standby accords. The bank had said that in spite of the interruption of the accords, it would strive to maintain the monetary goals requested. In graphic form, the figures show that in just about every area that required Central Bank compliance, the bank has failed to come up with the appropriate adjustments, nor has the government itself helped much, as shown by a RD$24-billion increase in public spending.
Marino Collante (PRSC-Santiago) told El Caribe reporters that the hearings on tax reform, would be renewed on Monday, and the commission headed by Collante is expecting to hear testimony from the PRSC party, CONEP and the Banking Association. On Tuesday, the Leon Jimenes Group and the Association of Advertising Companies will testify. The commission is scheduled to meet on Wednesday to work out the different proposals, with a conclusion expected by next Friday.