In order for the government to bring its finances into line for the IMF approval of a new two-year Stand By Accord, the authorities would reportedly have to raise taxes, reduce the subsidies to the propane and electricity sectors and increase the exchange commission that is collected on imports by 3%. Ironically, as these measures were being published in El Caribe and other newspapers, a differing report from the Herrera Industrial Association was published in Hoy, requesting the elimination of the exchange commission altogether. El Caribe says that the IMF is calling for a freeze on the government’s payrolls at the October 2004 levels, and rationalizes a 3% increase in the exchange commission to counterbalance the 2% import tax that was imposed last year but has since been discontinued. Presidential Minister for Technical Affairs Temistocles Montas told reporters that the IMF agreement presupposes that the government will manage to keep the public sector’s non-financial deficit to less than ?0.7% for 2005 and a projected surplus of 0.7% by 2006. Also included in the deal is a freeze on the payrolls at the current RD$38.5-billion level for 2005, which includes the 30% pay increase over the year. The reduction of gas and electric subsidies will bring in projected savings of US$400 million for electricity and US$206 million for propane. In 2004, the economic team calculated that the government spent US$650 million in electric subsidies for low-income neighborhoods and RD$9.0 billion on propane subsidies for household use. Montas reviewed the problem of the foreign debt for the reporters and said the government is facing US$464 million in late payments, of which US$250 million must be paid in order to finalize the agreement to reschedule debts owed to the Paris Club. In order to do this, the government’s negotiators are working with Morgan Stanley to secure a US$200-million loan and are looking for an additional US$70 million from the Dominican banking sector.