A new tax reform law being enacted to provide the Medina administration with RD$46 billion in order to deal with the current high spending levels of the PLD administration has caused an escalation in public discontent and protests by citizens. There are demands for accountability by the previous government, and a considerable reduction in the size of government and in unsustainable government spending.
Former President Leonel Fernandez (2004-2012) said yesterday evening, Tuesday 13 November, “that it was ridiculous and foolish” to say that the current fiscal deficit of RD$187 billion facing the government is synonymous with fiscal fraud and criminal activity.
In a televised address to the nation, the first since he left office last August, Fernandez said that relating the two situations “is only the work of a mind that is more oriented towards calumny or slander than reason, more oriented towards manipulation than the truth, and a gloomy soul corrupted by low passions.”
During the last few weeks, public opinion has largely blamed Fernandez for the fiscal deficit and has gone so far as to demand that he be investigated by the Justice Department. The president of the Alianza Pais political party, Guillermo Moreno, went as far as to file a complaint with the Attorney General of the Republic for Fernandez allegedly having committed acts of corruption which caused the fiscal deficit. But last night Fernandez stated that the causes of the fiscal deficit are a fall in the projected collections, which for this year were estimated to be RD$340 billion and will only reach RD$320 billion.
In the second place, he cited the subsidy to the Public Electricity Corporation (CDEEE), which had been budgeted at US$270 million for 2012, and will end up at US$1.27 billion.
Another “culprit” of the deficit, according to Fernandez, is the Central Bank (BC), which he said requires recapitalization each year from resources proceeding from the tax collections as a result of the financial crisis of 2003-2004 under former President Hipolito Mejia. “As you can appreciate, just three items alone (…) make up one hundred and forty billion of the fiscal deficit,” Fernandez summed up.
But, where is the remaining RD$46 billion that is missing? The former President said that it was invested in projects and institutional areas covered in the budget and approved by the Congress, such as the salary increase for the Police and Armed Forces (RD$2 billion), programs such as Solidaridad, Senasa, the Social Plan (RD$1.4 billion), the government’s retirement plan (RD$2 billion), the UASD (RD$543 million), the Congress, JCE and the nation’s courts (RD$1.04 billion). Also included was the non-transfer of price increases in fuel costs (RD$6 billion). Fernandez said that the remaining RD$30 billion was invested in infrastructure projects including the second Metro line, the Santo Domingo-Samana Highway and the Duarte Corridor.
www.noticiassin.com/2012/11/discurso-integro-del-ex-presidente-leonel-fernandez-sobre-el-tema-de-la-reforma-fiscal/
www.bajalealgo.net/home/2012/11/cnn-rechaza-discurso-de-leonel-fernandez-y-le-manda-fuego-conclurd-video/
www.youtube.com/watch?v=8UQuv-QebxE
www.youtube.com/watch?v=JrF-RTI2bCE&feature=endscreen&NR=1
http://abcnews.go.com/ABC_Univision/News/dominican-republics-fiscal-reform-protests-deficit-problems/story?id=17708900#.UKO7xY7XrR4
www.youtube.com/watch?feature=player_embedded&v=brScLFPLf9Q