The Chamber of Deputies modified the Law 28-01 that was designed to bring industry to the seven poorest provinces on the Dominican Republic by offering very extensive tax privileges. After prolonged debates, public hearings and plenty of lobbying, the deputies modified Article 2 of the law, introducing VAT taxes (ITBIS), selective luxury taxes on alcohol and tobacco products, the exchange commission tax and limiting the import facilities of the law.
The bill now states that the packaging, repackaging, wrapping, bottling, mixing, milling and refining of products is no longer considered a process that will merit the tax benefits of the law. The decision comes after industry located outside of the border provinces protested advantages and the loopholes created for importers of finished goods.
The special commission of the Chamber of Deputies argued the law needed to comply with the IMF accord. Adding his weight to the defense made by the senators of the frontier provinces (Montecristi, Santiago Rodriguez, Bahoruco, Independencia, Pedernales, Elias Pina and Dajabon) bishop Tomas Abreu, the bishop for the Mao-Montecristi dioceses, told the panel that the change could mean 4,000 jobs will be lost in the industries already established and warned that the modifications would scare away future investment in the country.