The Dominican government could collect surplus revenue of approximately RD$13 billion if the US delays the start of DR-CAFTA in January as proposed. With the passing of the fiscal reform, the government will have a windfall of additional revenue, as reported in Diario Libre. These funds would not be included in the 2006 budget, and the Presidency would manage the surplus.
The newspaper points out that the fiscal reform would enable the government to leave in place the customs taxes, including the application of the 13% exchange commission for the first six months of the year, and at the same time apply the new fiscal reform that will produce revenues from other areas. The fiscal reform was carried out to secure new sources of funding, given that DR-CAFTA requires the elimination of the 13% exchange commission on imports, plus other duties for its scheduled implementation on 1 January 2006.
Industry and Commerce Minister Francisco Javier Garcia said that any decision on this would be taken by President Fernandez.
The newly approved fiscal reform is expected to render an additional RD$26 million.
Meanwhile, despite the doubt whether DR-CAFTA could begin to be implemented in January, the government has threatened to administratively apply charges to compensate for RD$4.5 billion in cuts carried out by Congress over those requested by the government. The fiscal reform was pushed through to compensate the government and not overtly to generate new revenues.
The Dominican government has reportedly delivered to the Department of Commerce of the United States the documentation for the start of the treaty in January, as Industry and Commerce Minister Francisco Javier Garcia told Diario Libre. Other news reports have speculated that only El Salvador is ready. But as explained by Bill Malamud, executive vice president of the American Chamber of Commerce, the treaty can go into effect with the certification of just one country.