Ousmene Jacques Mandeng, the International Monetary Fund representative in the Dominican Republic, told reporters form the Listin Diario that statements made by Jesus Saede, senior advisor in the IMF’s Fiscal Affairs Department, during a conference in Costa Rica on the fiscal challenges ahead in Latin America were taken out of context. He explained that Seade was referring to the agreement of the DR in the letter of intent of achieving an improvement in public finances of 4% of GDP, which he said could be accomplished with the reform and the adjustment of spending.
Therefore, according to Mandeng, the tax reform contemplated by the IMF does not require tax increases nor increased tax pressures. The suggestion of the IMF is that the new tax reforms should be neutral, substituting income that the government will stop receiving as a result of the DR-CAFTA agreements.
He said the 4% adjustment would be reached with the fiscal reform tax adjustment, reductions in public spending, such as the elimination of the electricity and propane gas subsidies, which he commented, as reported in the Listin Diario, would happen in June.
“What we want is a compensatory reform, accompanied by a more equitative allocation and an increase in the efficiency of tax collections, said Mandeng, as reported in the Listin Diario. He made the comment when presented with the reality that fiscal reform in the DR has been traditionally applied to fix fiscal holes. He said that next week a mission economic team would travel to Washington to discuss fiscal reform.