Economist V?ctor Canto is proposing that the much-debated tax reform should consist of just two taxes: An across-the-board flat tax on income, no greater than 12%. The proposal would eliminate all other taxes and establish a VAT (ITBIS) that would be applied to everything as well as the flat tax on income. Interviewed during the Economic Meeting at Hoy newspaper, professor Canto argued that the lower 12% VAT would contain less of an incentive for evasion and that income should only be taxed once. Savings, in Canto?s opinion should not be taxed. Another of his arguments for the lower and much broader application of the 12% VAT was that such a tax structure would require fewer people to administer and collect the money and there would be fewer distortions throughout the system with a flat rate income tax. Canto, a Dominican economist who has worked mostly in the United States, said that an increase in VAT would not show up as an increase in the cost of the basic family food supply, since there would be a simultaneous reduction of 16% with the elimination of the tax on dollars used to purchase imports. Looking at issues such as depreciation of major items such as vehicles, the economist told the economic writers that it would probably be better to do it at one time, rather than spread out over several years.
When Canto was asked about how to help the poor, he suggested that instead of offering exempt status on taxes and electricity, the poor would be better served through social programs provided by the government, such as an effective school breakfast program.