2006News

Double taxation

The Fernandez administration will benefit from double taxation as a result of its decision to delay the implementation of DR-CAFTA until at least July 2006. The government has moved a bill through Congress aimed at generating sufficient new revenues to compensate for the removal of the 13% exchange surcharge. However, it then decided to keep the exchange surcharge and keep the new taxes, benefiting from a windfall of new revenues. According to a report in El Caribe, the double taxation will only not apply to a list of reportedly 16 items that now will be taxed with the 16% VAT (ITBIS) rate. Eduardo Rodriguez, technical deputy director of Customs, called the exchange surcharge a transitory tax on imports and said it will remain in effect until 30 June. Around 2,264 items are subject to the import tax, according to Customs.