Businessman Jose Manuel Paliza, speaking at the Dominican Republic Association of Industries anniversary event in the presence of President Danilo Medina yesterday, Thursday 31 October, said that 20 years ago the government debt (foreign and domestic) was 4% of the GDP. He said that the debt has now increased to 40% and that in 2014, it will be 55% of GDP.
“It is not so much the percentage, but the speed at which we have been taking on debt and how soon we will reach our limit for taking on debt,” he said. He said the usual strategy of increasing taxes is also approaching the limit, as the local 18% ITBIS is one of the highest in Latin America and income taxation is at 29%. He also stated that labor costs are 60% of the wage paid, which also affects local competitiveness. Paliza advocated for adapting the labor code to modern times to reduce costs and make the country competitive. He said that having both pension and severance plans are not compatible. The business leader recalled that when the Social Security Law was renewed, workers receive a pension but kept the severance plan.