2005News

Extension of VAT will collect RD$11 billion

According to a Tax Department source, the extension of VAT (ITBIS) to approximately 200 products which are not currently taxed, will provide collections of RD$11 billion annually. Of this total, three products – sugar, coffee, and cooking oil – represent RD$4.2 billion (38.1%). With the extension of VAT, the government seeks to recover approximately RD$32 billion it will stop receiving when DR-CAFTA comes into effect on 1 January 2006. El Caribe reports the sources of the income that will be lost include the elimination of 13% exchange rate commission, distorting taxes as well as tariff reductions. Products that will remain free of VAT are meat, powdered milk, evaporated milk, eggs, legumes, produce, fresh and refrigerated potatoes, fresh and refrigerated tomatoes, onions, garlic, unprocessed fruit, cereals, flours, oatmeal, rice, and wheat flour. Fuels to be excluded are kerosene, natural gas, propane gas, crude petroleum oil, aviation fuel, other gasoline, and electric energy.