Following a lengthy debate, the Chamber of Deputies approved the modified tax reform package last night in a second reading. The legislation, which was compiled by the PLD and submitted to Congress by former President Hipolito Mejia, went through with the “critical votes” of the PRD and PRSC opposition parties, according to the Listin Diario. The bill was approved by a vote of 126 for and six against, while seven deputies did not vote. If this fiscal package is ratified by the Senate, the government will take in RD$6 billion between now and the end of 2004, while 2005 would see official revenue of more than RD$19 billion.
Shortly before its approval, Alfredo Pacecho, the Chamber of Deputies leader, and Ramon Agramonte, the spokesman for the PRD, announced that a draft bill would be submitted to Congress within the next week, with the aim of establishing a 30% salary increase for public- and private-sector workers of the country. The PRD attempted to introduce this measure in a new article of the legislation last night, receiving a vote of 68 deputies for (41 PRDs and 26 PRSCs) and 50 against. When the constitutionality of this process was challenged, an impasse looked likely in the legislative house. After a 20-minute recess, however, it was announced by Pacheco, Agramonte and the PLD’s Elias Serulle that the measure would be submitted separately, according to Diario Libre.
Among the items removed from the legislation was the Selective Consumption Tax that would have established a 16% surcharge on insurance, advertising and air and ocean fares. Instead, a 16% VAT (or ITBIS) will be levied for air and marine transport of cargo and passengers alike. Advertising services in the media are to be assessed 6% until 31 December 2004, 10% in the year 2005, and 16% in 2006. Taxes on alcoholic beverages were set at 50%, from a previous 40%, while cigarettes will be hit with a surcharge of 40%.
According to the new fiscal laws, salaries less than RD$22,000 will not be assessed. In addition, a measure approved in Article 9 of the fiscal legislation, which deals with anticipated earnings, establishes that the authorities will not allow companies to use balances owed to them to remit the 1.5% of their expected gross income for 2004.