However, he acknowledged that defining the taxation mechanism “is not so easy.” “Because you can’t impose an income tax on Airbnb, because it’s not here (in the country), and what we’re doing is, based on international experiences, looking for ways to ensure that these digital platforms, for the income they generate from Dominican sources, receive reasonable taxation.”.
SANTO DOMINGO – The Minister of Finance stated that not including tax payments from digital platforms in next year's budget "would be a sacrilege," and therefore assured that the government included the revenue from digital platforms in the 2023 budget.
“That’s happening,” declared José Manuel (Jochi) Vicente yesterday, although he said he didn’t know when it would take effect. “Not going would be sacrilege,” the official pointed out.
“Airbnb is unfair competition to our hotels, to Dominican-owned hotels, to Dominican workers,” Vicente emphasized in a meeting with journalists from the economic sector, referring to the international platform that allows online rentals of accommodations offered by their own hosts.
Although the draft regulations governing the procedure for applying the tax on transfers of industrialized goods and services (ITBIS) to digital services, such as Netflix and Airbnb, have not yet been approved, the Executive Branch has already considered the tax revenues that its collection would bring, in the Draft Law of the General State Budget of 2023.
The explanatory report of the project indicates that there is a group of actions and administrative regulations that, even though they will be implemented and enacted in 2022, will have a decisive effect on the fiscal year of the General State Budget 2023, for the sustainability of resources and compliance with internal and external obligations.
Among those regulations, he cites, with regard to the General Directorate of Internal Taxes (DGII), "the approval of the Draft Regulation" that regulates the procedure for the application of the ITBIS "to digital services captured in the Dominican Republic and provided by foreign suppliers"
However, he acknowledged that defining the taxation mechanism “is not so easy.” “Because you can’t impose an income tax on Airbnb, because it’s not here (in the country), and what we’re doing is, based on international experiences, looking for ways to ensure that these digital platforms, for the income they generate from Dominican sources, receive reasonable taxation.”.
The DGII (General Directorate of Internal Revenue) submitted the draft resolution to public comment; its approval is pending from the Executive Branch. Its head, Luis Valdez, has anticipated that the tax on digital platforms is projected to generate more than 3 billion pesos.
He said that this amount will be collected gradually, after the Dominican government begins to implement its collection.
“All countries in the world are – many already have – in the process of taxing everything related to digital platforms because, essentially, this is a new economic activity that has emerged as a result of technological advancements, which is eroding the revenue-collecting capacity of states,” said the Finance Minister.
On Wednesday night, the Executive Branch, through the Ministry of Finance, submitted to the Chamber of Deputies the draft General State Budget Law for 2023, which proposes expenditures for the Central Administration of 1,247,578.1 million pesos.
The document, submitted by the Deputy Minister of Budget, Accounting and Contracting, José Rijo Presbot, estimates that the total revenues of the central government will amount to 1,040,005.5 million pesos next year, equivalent to 15.1% of the gross domestic product (GDP) estimated for 2023.
Text modified with information from Diario Libre
