Technical Minister of the Presidency Temistocles Montas has developed a draft tax reform that would compensate the estimated RD$30 billion impact on collections during the first year of the DR-CAFTA. The proposal includes: an increase in the application of the VAT (ITBIS) at a different rate and exempting some food items, medicines and health and education services; the application of the income tax to free zone industry profits; the application of the income tax to interest generated by bank deposits; an increase in the selective consumer tax on alcoholic beverages and tobacco; the unification of the selective consumer tax to the import of vehicles; and the modification of the tax system established in the fuel law. The official did not specify the amounts of the taxes.
Also included is the increase of tariffs to countries not included in the DR-CAFTA. The proposal will be discussed starting today by a technical commission composed of government officials, businessmen, and lawmakers created yesterday at a meeting of the National Dialog, coordinated by Msgr. Agripino Nunez Collado. The final proposal must be ready on 25 July. After that day, a higher-level commission will refine the proposal and motivate its presentation by the Executive Branch to Congress on 16 August.
Meanwhile, Msgr. Nunez Collado sustained that a political pact regarding the DR-CAFTA and compensatory measures is being developed and has been practically approved by the PLD and the PRSC. The pact was to be discussed yesterday afternoon by the PRD.