Apolinar Veloz and Francisco Tavárez propose a democratic fiscal pact to eliminate privileges, combat tax evasion, and alleviate the burden on the middle class and vulnerable sectors.
SANTO DOMINGO. – “Tax reform is a decision, whether the government likes it or not, because it is simply about collecting taxes from those who have traditionally received tax privileges from the government,” said Apolinar Veloz, while presenting a comprehensive tax reform proposal alongside Francisco Tavárez.
Both economists pointed out that the Dominican tax system maintains differences in the tax burden between sectors and allows business groups to receive exemptions while evasion levels are high.
Veloz stated that “those who bear the brunt of government financing are consumers, and these consumers are primarily from the middle and lower classes of this country. We not only pay taxes, but we also help the wealthy receive tax breaks,” Veloz added, during an interview yesterday, Tuesday, on the program El Día, broadcast by Telesistema.
Francisco Tavárez stated that “tax exemptions in the 2026 budget will amount to more than 350 billion pesos.” He added that, including estimated tax evasion, the country would lose more than 8% of its GDP, representing over 600 billion pesos in tax revenue.
He explained that ITBIS evasion reaches 40%, corporate income tax evasion 62%, and evasion by individuals close to 60%. "For every 100 pesos, the State is losing more than half," he stated.
Both specialists agreed that it is not necessary to raise taxes, but rather to redistribute the burden. "What this reform will do is redistribute the burden, which is currently very heavy on the consumer," Veloz said.
They also mentioned governance issues in the granting of tax incentives. They indicated that councils such as the Tourism Development and the Free Trade Zone Council are made up of businesspeople who approve tax benefits. “The State does not have the capacity to determine when it is prudent to grant a permit,” Tavárez commented.
One of the cases presented was that of the mining company Barrick Gold. “The government doesn’t know the purity of the gold leaving the country,” Veloz said. Customs has a laboratory to verify it, but it’s not operational. “The government’s estimate of mining tax revenue is provided by Barrick,” he added.
Economists also addressed the growth of state welfare programs. Although monetary poverty has decreased, the number of beneficiaries of social programs has increased. “It’s not social policy, it’s pure and simple welfare ,” said Tavárez.
Purchasing power
Regarding purchasing power, they explained that inflation affects real income. “You take 25,000 pesos, and when you adjust for inflation, you can buy goods and services worth 18,000 pesos,” Veloz illustrated. They also pointed out that the income tax threshold has not been indexed to inflation, as required by law.
Fiscal pact
Finally, they called on citizens to participate in a broad fiscal pact. “You can’t take an economic policy measure of this magnitude without involving the people,” they stated. The coalition promoting this reform doesn’t yet have a name, but it is preparing a national call to action to demand tax reform.
Apolinar Veloz is a professor of Economics at INTEC and a researcher at the ODPP-UASD. He was an official at the Central Bank and a consultant for the International Monetary Fund. Francisco Tavárez is an economist and professor, a graduate of UASD, specializing in economic policy and public finance in France. He has worked at the Ministry of Finance and currently directs research at the National School of Accounts of the Chamber of Accounts.
