When Deputy Marino Collante spoke about agreements reached between the government’s economic team and the Chamber of Deputies Finance Commission to withdraw several items from the application of VAT (ITBIS) as reported in yesterday’s Diario Libre (see DR1 Daily News 20 October 2005), Tax Department Director Juan Hernandez angrily denied the information. Other members of the economic team are also pressurizing Collante to withdraw his statements. Diario Libre interprets the reaction as an interest in having the political advantage of releasing the information at the government’s will and reproduces the complete interview with Collante as evidence that their story was genuine.
According to Listin Diario, Hernandez stated that since the beginning of the discussion and the design of the tax reform, the government has estimated that the elimination of the 13% exchange rate commission on prices would be neutral. He said that all products are currently taxed with the 13% commission and after the reform there will be products that will not be affected, such as medicines and school supplies. Hernandez specified that the government only wants to recover the income it will stop receiving once the DR-CAFTA accord comes into effect.
El Caribe reports that a Tax Department source has indicated that the Chamber of Deputies Finance Commission agreed to keep coffee, sugar and cooking oil on the list of taxed products when they found out that these products represented 38.1% of the total expected to be collected when the application of VAT is extended.