The much debated tax reform bill passed its first vote in the Chamber of Deputies last night with a majority vote of 121 yeas out of the 131 deputies present, as reported in Listin Diario. Today it has to pass the final vote in the Chamber. The bill excludes taxing sugar, molasses, oil, coffee, cocoa, chocolate, fertilizers and their components, insecticides, pesticides, herbicides, raw materials and capital goods for the agribusiness sector, seeds, and animal feed. Also excluded are pencils, chalkboards, chalk and gymnasiums, “among many other products of mass public use”. The bill was modified following a request by a group of PRSC and PRD deputies who sought to exclude a 2% anticipated tax on imports as suggested by the US Trade Department, which has said that tax would mean unequal treatment for imported products and could hinder the DR’s chances of entering DR-CAFTA in January 2006.
Diario Libre indicates that the bill has been in Congress for two months and ten days. The modified version that was voted on last night represents collections worth RD$25 billion. It includes a 1.5% anticipated income tax on net sales and an increase in fuel taxes. Also, the first registration of new vehicles was increased to 17% and the selective consumer tax on several household appliances was increased to 32%.
El Caribe reports that the Chamber of Deputies session last night lasted for four hours and that the modified version of the bill voted on cuts back the original amount proposed by the government by RD$7.3 billion.