Senate president Jesus ?Chu? Vasquez Martinez told reporters yesterday that the tax reform package will be a bitter pill to swallow for the Dominican people, but that he sees no other viable option that would fulfill the obligations the country has with the IMF. At the same time, Vasquez appealed to the industrialists and the business and banking communities to attempt to present a fiscal package that will affect the poor as little as possible. Vasquez said he understood that the legislators must ease the passage of the proposals because ?all of us are committed to the IMF and we have to fulfill their demands in order to get this country out of this financial crisis.?
And during the tax reform?s ongoing public hearings at the Chamber of Deputies, the Federation of Industrial Associations (FAI) expressed its worry that the proposed 0.15% tax on checks would affect the development of the small- and medium-sized businesses (Pymes) as it would represent a double taxation. The FAI furthermore said it would favor a similar tax on the resulting benefits from financial assets, but excluding savings accounts and small depositors. The tax on checks, according to the industrialist association, would fall mostly on the Pymes because of the trickle-down effect, but the largest corporations would avoid this by performing electronic transfers of funds.
Another challenge to some of the provisions to the proposals and counter-proposals is the position taken by business leader Rafael Alvarez Crespo who disputes the benefits of the agreement that was publicized yesterday that would tax electronic transfers and other operations at the rate of 0.15% per thousand pesos. Alvarez was joined by the president of the Dominican Federation of Merchants (FDC), Ivan Garcia who warned that the proposed tax could lead to a turn towards ?informal? techniques of payment, with the concurrent lack of transparency. Their counter proposals were to tax savings interest at a rate of 10%. The merchants were joined by several legislators that do no like the deal that would change one tax form for another.