The Dominican government is facing a very large debt service this coming year and the figures, at least in the newspapers, are not matching up well for the budget planners. According to Hoy, the government must pay RD$65 billion in debt service fees in 2007, about US$1.97 billion at current exchange rates. Temistocles Montas, the President’s Minister for Technical Affairs (STP) told reporters that the government would dedicate 6.3% of next year’s GDP to pay foreign debts service charges. Listin Diario says that a reduction in income and the new charges for debt servicing are a major challenge for the budget planners. One of these new charges is that the two-year moratorium requested by the government at the beginning of its current term is now up, and US$200 million in payments are due. And another new situation for the planners is the payments that are due on the interest of the bonds that were issued to recapitalize the Central Bank and reduce the quasi-fiscal deficit. This will require about RD$5.5 billion. What is troubling the budget planners is the lower-than-expected results of the most recent tax reform program. While it increased VAT and broadened the consumer tax base, other taxes are producing lower returns than expected. Many businesses have begun to require cash payments in lieu of checks that are taxed. Added to that, the DR-CAFTA agreement for which many taxes were eliminated has not yet begun and therefore tax income from the new businesses and industries has not arrived, either. Facing a promise to create 600,000 new jobs over the next two years, the government must now face the reality of a new tax reform bill.