Leading Dominican economist Pavel Isa Contreras says that the middle class and the poor stand to lose most as a result of the taxation patch the government seeks to impose to reduce its fiscal deficit. He said that these sectors would feel the effects of the increase of the ITBIS (VAT) tax, and the new taxes on basic consumer goods and gasoline, as reported in El Dia.
He said that the Medina government has not said how it will spend the new revenues.
“The government can reduce and improve the quality of public spending to keep macroeconomic stability and avoid having to make a new fiscal patch that will affect the vast majority,” he said.
Speaking on the TV program “Lideres,” Isa Contreras said that the proposal sent to Congress contradicts what Medina had promised during the presidential campaign.
“It was the same government party that was responsible for the situation we are now going through,” said the economist.
The greater portion of the fiscal deficit is attributed to overspending by the Fernandez government during the election campaign and during the transition period.