Although many establishments did not open their doors yesterday, Wednesday 1 January because of the New Year’s festivities, the 8% to 11% increase in the Tax on the Transfer of Industrialized Goods and Services (ITBIS) is now in effect. This tax increase is being applied to the list of products that began to be subject to this tax last year as part of the latest tax reform. This increase in the ITBIS means that consumers of products like coffee, sugar, chocolate, yogurt, oil, butter and others will have to readjust their budgets due to the 3% increase that will now be applied to these items by commercial establishments under the mandate of this law. With the aim of reducing the impact of this increase at the beginning of the year, some of the major supermarket chains with branches throughout the country announced last week that they would absorb this tax increase from 8% to 11% for one month.
Nonetheless, a large number of establishments will apply the scaled increase, as ordered by the new fiscal law, which will cause an increase in the prices of some of the products in the basic family food basket: sugar, yogurt, butter, coffee and cooking oil. In order to provide an idea, it is estimated that the 8% to 11% increase in the ITBIS would represent less than an additional peso in the retail sales price for some products. A small package of coffee which as of yesterday, Wednesday 1 January was sold for RD$15, will go up RD$0.40 with the application of the ITBIS. In the meantime, sugar will go up between 55 and 70 cents from current prices of RD$20/lb for brown sugar and RD$25/lb for refined.
The increase in prices of alcoholic drinks is due to the fact that for this year the scaled ITBIS was planned for those items that were not covered by this tax before 2012. The tax will go from 8% to 11% in 2014 and to 13% in 2015 and to 16% in 2016. However, in addition, alcoholic beverages will also get a tax hike for each liter of pure alcohol. This means that malt beverages (except Malt Extracts) and wine from fresh grapes will pay a tax of RD$514.10 for each liter of pure alcohol rather than the RD$489 that they paid in 2013.
Bravo, Nacional, Jumbo, Plaza Lama and Ole supermarkets announced they would not apply the increase in January.
www.diariolibre.com/economia/2014/01/02/i421641_los-consumidores-sentirn-desde-hoy-alza-del-itbis.html
www.elcaribe.com.do/2013/12/31/inicia-round-del-itbis-selectivo