After four rounds of talks, the government economic team and the Chamber of Deputies’ special finance commission obtained a consensus on a new set of tax reforms. The fiscal package that won acceptance will produce RD$19 billion for the national treasury, RD$3 billion less than the original plan. The legislation was placed as the fist item on today’s agenda in the Chamber of Deputies, according to Marino Collante, the spokesperson and president of the finance commission. Hoy newspaper reports that the government representatives, as well as Chamber president Alfredo Pacheco, expressed their satisfaction with the reforms. The newly-appointed head of the Customs Department, Miguel Cocco, said he felt the understanding that was gained with the opposition PRD party was a great step forward. Cocco told Hoy reporters that while the talks were frustrating at times, the result was very satisfactory and he applauded the work done by Pacheco and Collante. For his part, Pacheco said the new proposals presented by the government’s economic team “didn’t go over very well,” as they did not incorporate any of the modifications that had been introduced into the tax package by Collante’s commission. He acknowledged that, however, despite the fact there are still some differences pending, the modifications that were agreed upon last night will probably ease the bill’s passage in a vote at the Chamber of Deputies.
Today’s Diario Libre illustrates the amendments made to the original tax reform package as such:
Measures included in the original version that have been removed:
25% increase on alcohol and cigarette taxes
New measures in tax administration
Modified personal and business tax levels
Taxes for professional services (doctors, lawyers etc)
VAT (or ITBIS) raised to 16% on airfares, boat fares and insurance policies
3% tax on property transfers and company formations (SA or CxA)
The new version furthermore includes:
Payment of anticipated taxes (1.5%)
VAT (or ITBIS) goes from 12% to 16%
A tax of 0.12% on checks, with certain exceptions
Luxury property tax starting at RD$3 million
Inheritance tax of 5% on everything and a tax of 25% on donations
There are other items in the new proposal that was accepted last night, such as reducing the tax on rental income from 20% to 10%, as well as the removal of Presidential discretion with regards to the amplification of the VAT’s tax base.