Economists Mercedes Carrasco and Rafael Espinal addressed several issues regarding the Dominican Republic’s fiscal reform. The ruling Modern Revolutionary Party has the vote in Congress to pass whatever reform once the new congress starts on 16 August 2024.
Rafael Espinal, professor at Intec and former president of the Dominican School of Economists (Codeco), highlights that the fiscal reform needs to be aligned with structural reforms in the labor sector, social security, electrical sector, reviews of spending in public administration, strengthening of the judicial system, government subsidies, location of the investment, water resources and environment and the reduction of poverty.
Economist Mercedes Carrasco advocates for the government to first stop wasteful spending reflected in current expenditures. She says wasteful spending has reached two and three digits in all the ministries and branches of government. She urges fixing situations, such as correcting the electrical problem and losses of the electricity distributors. She also sees a need to first reduce the percentage of the budget the government is paying for interest on the public debt, including that of the Central Bank.
Fiscal Reform has been postponed for years.
The fiscal pact is a key element of the Dominican Republic’s long-term development strategy, as outlined in Law No. 1-12, which establishes the National Development Strategy 2030. This landmark legislation, enacted on January 25, 2012, underscores the importance of fiscal reform in achieving sustainable development goals.
Article 36 of Law No. 1-12 specifically defines the fiscal pact as a comprehensive approach to enhancing the efficiency, transparency, and equity of the Dominican Republic’s tax system. It emphasizes the need to increase tax revenue to support the fulfillment of the sustainable development objectives enshrined in the National Development Strategy 2010-2030.
The fiscal pact envisions a robust and modernized tax system that effectively mobilizes domestic resources to finance public investments in key areas such as education, healthcare, infrastructure, and social protection. It aims to foster a culture of tax compliance and promote a fairer distribution of the tax burden.
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Listin Diario
13 June 2024