The 31 senators (29 PRD, one PLD and one PRSC) were unable to reach a consensus yesterday to pass the tax reform bill. While there seems to be agreement on the issues that specifically relate to the tax reform bill, the most recent snag has been the last-minute inclusion of a provision to tax corn syrup imports. The DR’s influential sugar lobbyists oppose the measure that would affect local sugar sales, and the equally strong export free zone manufacturers’ sector says including the new tax would unhinge the DR-CAFTA signed with the United States, as well as free zone contracts and new business versus competitors in Central America. Senate leader Andres Bautista Garcia told Diario Libre there is no consensus yet and a decisive meeting would take place today. Meanwhile, the lone senator of the ruling PLD party, Jose Tomas Perez, said that the decision is up to President Leonel Fernandez.
On the other hand, Listin Diario reports that the tax reform’s passage is being stalled by the PRD senators for political motivations. The newspaper says the party’s political commission instructed the senators loyal to the PPH faction of the PRD not to approve the second reading until the government recognizes and shows respect for the constitutional decisions made by former President Hipolito Mejia.
After a meeting that lasted nearly four hours in the office of the head of the PRD senators, yesterday’s session was called off and rescheduled for this morning.
The ratification of the fiscal reform package is of special interest to the Fernandez administration because it is a condition required by the International Monetary Fund to disburse new resources to the government. Furthermore, the government expects the tax reform bill to provide additional revenues in order to proceed with government spending.