If the government tax authorities indexed salaries as originally mandated by the law, it could cost the government some serious money, according to economic analyst Miguel Collado. The process involves multiplying current salaries by the inflation adjustments authorized by the Central Bank. The result would be that only those earning over RD$50,098.33 per month would be paying income taxes.
The study, prepared by the Regional Center for Sustainable and Economic Strategies (Crees) noted that previously, taxes were paid on salaries of RD$34,685.00 at a rate of 15%.
Economist Collado said that since the 2018 budget was approved inflation adjustments on salaries were set aside, and the process continued over the years, and as a consequence, persons with yearly incomes over RD$416, 220 are taxed at a rate that varies between 15% and 25% according to the wages.
According to the report from Crees, the accumulated amount of adjustment for inflation over the years, now raises the minimum wage exempted from taxation to RD$601,000 per year.
The Dominican Tax Code establishes the adjustments, but the yearly budget laws have been carrying an article that eliminates the calculations that would increase the tax exemptions for employees.
As a result of the government policy, the increasing prosperity of the Dominican Republic has kept the tax exemption at around RD$34,000 thus increasing government income. Last year, 2024, income from these individual income taxes came to over RD$91 billion, Diario Libre reports.
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Diario Libre
27 January 2025