Taken from Listín Diario
SANTO DOMINGO.- In the Dominican Republic, since the implementation of the 1992 Tax Code, tax reforms have been based on tax revenues supported by consumption, contrary to the provisions of the advanced countries of the OECD (Organization for Economic Cooperation and Development).
A macroeconomic report from the Inter-American Development Bank (IDB) raises the issue of the regressive nature of the Tax on the Transfer of Industrialized Goods and Services (ITBIS) , which continues to be a dominant factor in reforms, especially in the Latin American region.
It notes that governments often exempt specific goods (e.g., basic foodstuffs) to lessen the impact on inequality. “However, up to 70% of the revenue not collected under current VAT systems in the region goes to people who are not poor , making it a very inefficient way of transferring resources,” it adds.
Experts from the International Center for Tax Administration (CIAT) and the International Monetary Fund (IMF) believe that “applying a unified VAT rate without exemptions and collecting more revenue, but then using those resources for a well-targeted system of transfers to the poor, would be a more efficient policy combination.”
In the latest reforms there are also measures that were not applied, such as the Vehicle Circulation Tax (ICV) , through which high-displacement cars of lesser year of manufacture (new and luxury) are taxed.
Currently, countries in the LAC (Latin America and the Caribbean) region are considering including taxes in their tax systems for the digitization of entertainment services like Netflix, shopping services like Amazon, Spotify, Google, and Uber (a transportation platform), and accommodation services like Airbnb.
Lowering public sector salaries:
IDB fiscal experts have also drawn attention to high salaries in the public sector.
Expansion
The expansion of the tax base in the country is always part of tax reform discussions.
Exemptions
Although it is a subject of debate and recommendation from international organizations, exemptions in different sectors are generally maintained.
