Finally, the Government presented its fiscal reform proposal.

DOMINICAN REPUBLIC - In Brief 08 Oct 2024 by Magdalena Lizardo

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Arguing that the Dominican Republic cannot depend indefinitely on debt to finance public services, and that there is a need for greater spending to fund the provision of public services, the Minister of Finance, Jochi Vicente, presented the fiscal reform proposal yesterday. According to the authorities, the Fiscal Modernization Law proposal would create “a new fiscal framework that promotes transparency and equity, combats tax evasion, and protects the most vulnerable,” while “correcting historical distortions, making the state more efficient, and simplifying the tax system.” The tax reform aims to increase tax burden by 1.5% of GDP, which would represent approximately DOP 122.5 bn (USD 1.2 bn). The Government's strategy is based on four pillars: Social protection and minimum wage increase: To mitigate the impact of tax modifications on the purchasing power of the population, the government will increase social assistance from USD 27.4 to USD 33.2 per month and raise the public sector minimum wage from USD 166 to USD 249 per month. The Minister of Labor must negotiate an increase in the minimum wage in the private sector.Public investment programs and prioritized spending: The revenue collected through the fiscal reform will be invested in the following areas: public safety (USD 0.22 billion), transportation (USD 0.6 billion), primary healthcare (USD 0.18 billion), local governments (USD 0.18 billion), recapitalization of the Central Bank (USD 0.37 billion), and the electricity sector (USD 0.30 billion). Clear and equal rules for everyone and reducing tax evasion: Two companies with the same net profits should pay the same taxes. To combat tax offenses, the following m...