In 2003 the evasion of the local sales tax, or ITBIS, reached 42.8%, according to a report released by the Tax Department (DGII). El Caribe newspaper says that the department has a plan to cut evasion by 10% in 2005. Juan Hernandez, director of the department, said that evasion had gone up after reaching a low of 29.71% in 1999, down from 39.83% in 1995. He attributed the high level of evasion to the department’s inefficiency, a lack of faith in the tax administration and the absence of ethical values in the institution.
The tax department says that their plan seeks to cross check information, encourage consumers to request their credit card vouchers in stores and apply drastic measures against ITBIS evaders. Hernandez admitted that tax evasion should be at around 21% when taking into account small businesses, which have proven too costly to monitor.