The former governor of the Central Bank, Luis Toral, has said that the government can meet its present level of spending once DR-CAFTA comes into effect, without the need for fiscal reform. Speaking at a press conference at the Barcelo Gran Hotel Lina, he said that fiscal reform could wait until 16 August 2008. He said that present government resources are sufficient to cover the RD$150 billion of government spending, compensate productive sectors with RD$6 billion and cover the RD$21 billion of the abolition of the exchange commission. This is if the government decides to abolish the exchange commission overall when Congress approves DR-CAFTA.
“I am absolutely sure that the government does not need more resources because with the present tax structure, the exchange rate, inflation, and improvements in tax administration, and the levels of growth of the DR, it will receive an immense amount of resources, sufficient to cover its present structure of spending, that is spendthrift and wasteful and covers needs that would come with the implementation of the FTA,” said Toral, as reported in Hoy newspaper.
He rejected the notion that the reform is a requirement of the International Monetary Fund. He said that “authorities who say this are deceiving the public, induced by the fiscal voracity that has always characterized them.” He continued: “If we take into account information from the Central Bank that inflation from January-June 2005 is under 1%, then it means that those RD$30 billion are real additional resources that the government has at its disposal to meet its commitments,” he said.
Toral mentioned that added to this the increase in the Gross Domestic Product, that according to the Central Bank was 6%, and the improvement in the tax administration, that according to the director of the Tax Department has been 32.4%.
Toral is also a high-ranking PRSC opposition party member.
He stated that the main obstacles to national competitiveness and the better implementation of the FTA with the United States include the high cost of power, low levels of education and health, and citizen safety.
He urged President Leonel Fernandez, the PLD, PRD and PRSC political parties, legislators, churches, businesspeople, civil society and the national press to think of the middle class and all the poor people in the country and not pass fiscal reform at this time.