LatinNews Daily - 8 October 2024

*The Dominican Republic’s government led by President Luis Abinader has unveiled a proposed fiscal reform which it says seeks to boost public revenue to invest in key areas such as transport, health, security, and protecting the most vulnerable. The government said that the initiative, which will be submitted to the bicameral legislature in which Abinader’s Partido Revolucionario Moderno (PRM) has a clear majority, seeks to: guarantee equality between the contributors, modernise the tax system by eliminating distortions and exemptions, and bolster the tax administration to ensure fiscal compliance. It seeks to simplify the tax system in various ways such as eliminating advance payments by individuals and micro-companies, while advance payments by small and medium-size enterprises would be on only 40% and 60% of profit reported in the previous period, respectively; payments by the companies would be quarterly. Among other things, the fiscal reform initiative contemplates a unique rate of 18% for the tax on the transfer of industrialised goods and services (Itbis), a value added tax (VAT) applied to industrialised goods and services (currently some products have a lower rate). Certain goods and services would remain exempt such as basic goods like bread, rice, chicken, eggs and milk, and services like education, health, electricity, potable water, and rubbish collection, among others. The Itbis would be known as a VAT which would also be broadened to apply to digital services. The proposed reform is a declared priority of President Abinader, who took office for a consecutive second term on 16 August, along with a proposed constitutional reform package.