Next year’s budget is behind schedule as it depends on the approval of the tax reform bill. Traditionally, the National Development Council approved the Budget Proposal in mid-November, as a pre-condition for its submittal to Congress. Listin Dairio reports that the impasse now is that the government had previously presented the tax reform bill as compensatory measure for the removal of the exchange rate commission as required by DR-CAFTA. The commission is estimated to collect approximately RD$21 billion per year. The tax reform bill was modified and approved in the Chamber of Deputies and is now pending approval by the Senate, where it could enter new rounds of negotiation and debate. If that is the case, it might not be approved by the end of the year.
Hoy reports that the Senate will start debating the tax reform bill today whereas the Finance Commission is studying the inclusion of a proposal of spirits which would permit the removal of and increase in fuel tax by substituting the tax on alcohol content by an ad-valorem, which they estimate would generate some RD$1.4 billion. This information was provided by PRD Senate spokesman Tommy Duran. If the Senate accepts the rum producers’ proposal, the bill would have to be sent to the Chamber of Deputies again. Otherwise, after two positive votes in the Senate, the bill will pass to the Executive Branch where it could be signed into law or vetoed.