Lawyer Albert Fiallo, a tax specialist, said on Wednesday, 25 April 2018, that he agrees with the proposal by the International Monetary Fund (IMF) that has suggested that the Dominican government carry out significant tax reform. Generally speaking, most Dominicans do not understand the term “fiscal reform” as defined by the government, equating it instead to tax increases.
Fiallo says that tax reform is urgent because 45% of the income of the state comes from direct taxes and 55% is obtained indirectly. He cited an example in which a worker who finishes his or her day and has a beer pays the same value added tax (ITBIS) as the richest Dominican, and he said this is simply unfair.
Appearing on a radio talk show (La Super 7 en la Mañana on 107.7FM), Fiallo rejected the thesis that the poor do not pay taxes, taking a different point of view that they are the ones who pay the most as well as those people on a salary. He made it clear that when the IMF proposes to expand the base of the value added tax they do not say that starting now this tax will be paid for milk, as an example, but rather that the tax exemptions should not be generalized. He said the Dominican Republic is one of the countries with the largest amount of tax exemptions in the region (91), which represents a tax loss of RD $211 billion each year or about one third of the National Budget. He noted that the industrial free zones represent one of the sectors most benefited by these tax exemptions. He finished by saying that the Dominican Republic has to rethink its economic model and the country’s leaders in the public and private sectors must propose reforms of the nation’s tax system. The tax system according to Fiallo cannot be sustained on the indirect taxes paid by the poor because this is simply unfair.
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7 Dias
26 April 2018
