Wages will be exempt from income taxes up to RD$21,185 a month as of this January. The Department of Taxes said that they would increase the tax level from RD$20,000, established in October, to RD$21,185 taking into account the 28.74% inflation for 2004 reported by the Central Bank.
Dominican law establishes that the wage index be adjusted for inflation in January of every year. The DGII argued that it would increase the ceiling only by RD$1,185 because in October, as part of tax reform, the tax-exempt limit had already been increased 21.5% in regards to the RD$16,455.83 previous tax-exempt level.
Article 327 of the Tax Code establishes that every calendar year the President will order an adjustment for inflation based on the consumer price index of the Central Bank.