Yesterday was the first day the 16% VAT (ITBIS) rate was applied to a large number of basic supermarket items, instantly generating reactions of concern from many sectors, as prices increased. The fiscal reform supposedly was to compensate the government for the elimination of the exchange surcharge. But the government decided to instead postpone its adherence to DR-CAFTA until July 2006, but at the same time keep the exchange surcharge on most transactions, repeating in a windfall of revenues.
According to Diario Libre, PLD Secretary General Reinaldo Pared Perez has asked for measures to be taken to avoid affecting the poorest. He hopes that the government economic team will evaluate the situation and present alternatives that would affect the public as little as possible. Products affected include toothpaste, vinegar, tomato paste, fish, seasonings, baby food, ketchup, and table salt, among others. Congressional elections are slated for 16 May 2006 and the PLD seeks to increase its minority representation in Congress.