SANTO DOMINGO.- Beyond the new revenues that the State seeks to generate, one of the changes that could have the greatest impact on the Dominican economy would be the reduction of the distortions that for years pushed thousands of small businesses into informality.
That is the view of the former president of the Dominican College of Engineers, Architects and Surveyors (CODIA), Teodoro Tejada, who believes that the elimination and flexibility of the advances contemplated in Law 30-26 of Measures for Economic Growth, Fiscal Simplification and Mitigation of the International Crisis could facilitate the return of many micro and small businesses to formality.
The engineer argued that the advance payment scheme implemented in previous years generated burdens that particularly affected small businesses.
“This abusive increase in advance payments has led to small businesses operating informally, and now, with the implementation of this anti-crisis plan, this will decrease,” he stated.
A reform without an increase in the ITBIS (Value Added Tax)
Tejada emphasized that, unlike other tax reforms approved in the past, the new legislation does not include increases in taxes that directly affect the consumer.
In his opinion, the fact that the ITBIS, the Property Tax (IPI) and customs tariffs have not been increased represents one of the main elements that distinguish the initiative.
"These measures should receive the support of the population, as they are progressive in nature, since they do not increase taxes that directly affect the consumer," he said.
The impact of previous reforms
The construction businessman also recalled that several tax reforms were approved during past administrations and specifically cited Law 253-12, enacted in 2012, which introduced changes that, he claimed, had negative effects on small businesses.
In that regard, he argued that the current legislation seeks to address a complex international context without resorting to widespread tax increases.
Subsidies and fiscal deficit
Tejada also considered that the new measures could help prevent further deterioration of public finances, taking into account the resources allocated by the Government to subsidize fuels and other programs aimed at containing the impact of the international crisis.
In his view, the current scenario demands measures that allow economic stability to be preserved without placing greater burdens on the population.
The debate on reforms continues
Law 30-26 was enacted by President Luis Abinader after being approved by the National Congress. While various economic sectors continue to assess its scope, Tejada believes the measures represent a response to pressures stemming from the international context and an opportunity to encourage the formalization of thousands of small taxpayers.
"Current circumstances require us to make decisions that will allow us to maintain stability and strengthen the economy," he concluded.
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