Representatives of the National Council of Free Zones (CNZFE), Agribusiness Council (JAD), and National Association of Hotels & Restaurants (Asonahores), and supporting businessmen met in La Romana with local economic press editors over the weekend to hear the position of a new movement, known as the Lobby of Dominican Exporters. The lobby urged the creation of an alliance to seek that fiscal reform package that be passed contribute to the competitiveness of the productive sector.
They also mentioned that the government’s participation in the fiscal reform debates, represented by the director of the Tax Department, whose main role is to increase tax revenues, falls short of accomplishing the goal of contributing to national development, lacks transparency and on the contrary, may even contribute to maintaining the present government inefficiency when it comes to public spending.
Victor Nunez, spokesman for the group, explained that the Lobby of Dominican Exporters seeks to do away with the bias against exporting that he says has traditionally existed in the DR. “It is seeking a change in attitude, and strives to be an open forum for those who feel they can contribute to the national strategic plan that can serve as a sustainable plan in the medium and long range,” he stated. The group’s position is that there is more of a need to promote the fulfillment of the laws presently in place. He mentioned that the laws that provide incentives for tourism and agriculture are not being fulfilled by the government. He criticized the fact that the funds that Law 158-01 allocates to tourism promotion are being used for other purposes.
The lobby’s position is that fiscal reform needs to be more comprehensive and systematic, and should include elements aimed at contributing to the sustainable development of productive sectors and the nation. They presented 10 key points that are essential for national competitiveness.
The lobby urged for the application of clear rules that would penalize monopolies, now that the approval of the Free Trade Agreement is just round the corner, in order to protect small companies.
The lobby met in La Romana to strengthen alliances among the sectors that are not in agreement with the fiscal reform that has resulted from the National Dialogue discussions.
Economist Freddy Emam Zade, participating in the La Romana meeting, commented that the conditions are not in place for the approval of the fiscal reform, regardless of the FTA’s approval. In his opinion, productive sectors need a reform that is much more than just an increase in taxes. If not, “then we will be taxing the productive sector to maintain the unproductive bureaucracy,” he stated. He stressed that there should not be a rush to pass the fiscal reform, and that the government does not have any rush to pass the reform, nor is this a requirement by the IMF, nor for the implementation of the DR-CAFTA.
Speaking for the hotel sector, Enrique de Marchena stated during the meeting, “We are pointing out that the proposed reform will only cause government inefficiency to increase. It is a trail to the wrong road,” he said. During the meeting, the government’s inefficiencies were pointed out. For instance, the fact that there are 8,500 people employed by Customs, when studies have shown that only 600 are needed to do the job. There are 17,000 employees on the Ministry of Agriculture payroll, of whom only 3,000 are technicians. In addition, there are 106,000 people on the Ministry of Education payroll, of whom only 40,000 are teachers, meaning that 66,000 are bureaucrats. In private education, the ratio usually is of only one office person for every ten teachers.
Speaking at the meeting, Osmar Benitez of the Dominican Agribusiness Council (JAD) also has called for increased transparency in the fiscal reform package. He called for the abolition of what he described as taxes on technology. By failing to do so, he said, the government would be stimulating the use of Haitian labor. In his opinion, agriculture in the DR needs to specialize in order to survive the new DR-CAFTA era.
Economist Frederic Emam Zade said that while there is a consensus for passing the DR-CAFTA agreement, there is not yet a consensus for the passing of the fiscal reform. Emam Zade denied the passing of the fiscal reform is a requirement of the IMF, and emphasized that there is time to do it right.
To contact Dominican Export Lobby coordinators Victor Nunez, Hugo Ramirez or Alan Ramirez, write to lobby_exportador@yahoo.com