Economist Rolando Reyes questioned whether the government has set aside
sufficient money in this year?s budget to pay the foreign debt. He said that
there is ambiguity in the revenue estimates contained in the budget because the
initial plan was to increase revenues by extending the application of the ITBIS
tax to more products. At the last minute, however, the government opted for a
30% increase in the Selective Tax on Consumption, viewing it as less politically
damaging. The president of the Association of Appliance Distributors (Adimuel),
Juan Julio Brea, said that instead of receiving more tax revenues, the
government would instead receive less, as consumers refrain from buying these
items that already cost more because of the depreciation of the peso.
In view of this, Reyes questions whether the government is counting on 100% of
the exchange commission to meet its current expenditures. He mentions that of
the 10% duty on exchange transactions, 3.75% is allotted to the government for
the payment of the foreign debt, 1.75% is allotted to the Central Bank to cover
that institution?s debt and the difference is meant to be allotted to the
Central Bank to cover the so-called quasi-fiscal debt, or interest payments on
certificates of deposit. Reyes told Hoy newspaper that the budgetary
stipulations will need to be clarified at the time of signing with the IMF. He
believes 2004?s budget will need to be reformulated in terms of estimated
revenue.