If the government sets clear rules and implements the measure, there would be a decrease in the main construction materials of up to 20%
SANTO DOMINGO – The race to increase the cost of raw materials for construction will stop when the government calculates tariffs and taxes on materials based on maritime freight rates set before COVID-19, and not on the exorbitant current costs.
A significant portion of the industry's imports come from China. Before the pandemic, freight cost US$1,800; now it costs between US$15,000 and US$20,000. This significant increase has caused companies' tax burden to skyrocket, without the government taking notice.
Representatives from the sector have made numerous appeals to the Ministry of Industry and Commerce, but to no avail; and construction material prices continue to skyrocket daily in an inflationary wave that has placed the sector in dire straits. The latest indicators from the Central Bank show that it is the fastest-growing sector of the economy this year.
“Our proposal in this regard has been reiterated: we want the maritime freight prices established prior to the pandemic to be used as a basis for calculating the tariffs and taxes paid on products, in order to contribute to reducing the costs at which they reach consumers,” explained architect Jorge Montalvo, president of ACOPROVI.
The president of the Dominican Association of Hardware Stores (ADEFE), engineer Arturo Espinal, takes the same position, stating that the speculative bubble was started by the government itself by overloading customs payments.
If the government sets clear rules and implements the measure, there would be a decrease in the main construction materials of up to 20%, says the optimistic representative of ADEFE.
According to Montalvo, the inflationary process originates from abroad. “This could be a temporary measure until transportation costs stabilize internationally, and it has been very well received by other sectors and the governor of the Dominican Central Bank.”.
Small and medium-sized hardware stores are also asking large industries to be transparent about their costs because it is not the same to pay ITBIS (VAT) for a bundle of rebar that used to cost 40,000 and today costs 70,000.
