It is no secret that over 50% of Dominican labor works in the informal sector of the economy, that is, the sector that does not pay company taxes. As a result, there have been numerous attempts to reduce this imbalance and bring these elements into the formal sector.
One of the latest suggestions comes from Cesar Dargam, the vice president of the National Business Council (Conep), possibly the most powerful assembly of economic strength in the country. Dargam recognized the bureaucratic and monetary stumbling blocks that impede micro-, small, and even medium from entering the formal sector. As a result, these entities that represent over 50% of the workforce of the entire country are outside the formal sector and contribute little to the fiscal health of the nation.
Dargam’s suggestion is to create a single tax within the tax structure that would greatly simplify the entire process. This simplified tax structure would also be applied to entrepreneurs and independent contractors (like your A/C repair guy or the electrician who comes to your house), and this would also help reduce the informality.
Dargam noted that many times the informality is a decision taken: “I am not going to pay taxes.” But in most cases the provider just cannot take on the costs of entering the formal system. The single-tax proposal is currently in the hands of the Tax Agency (DGII). As the government sought to impose a fiscal reform in 2024, many experts called for the simplifying of tax-paying to make it easier for hundreds of thousands to enter the system.
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Listin Diario
10 March 2025