Last Thursday, June 11, through two separate meetings with the media, the Minister of Finance and Economy, Magín Díaz, presented for the first time his so-called “anti-crisis plan”, which consisted of a reform of tax policy as a way to combat the onslaught of the crisis produced by the war between Iran and the United States.
Just one week later, after being urgently approved in the two legislative chambers of the National Congress, the so-called Law of Measures for economic growth, fiscal simplification and mitigation of the international crisis was promulgated by the Executive Branch.
Today’s Law 30-26 was approved in the Chamber of Deputies in two consecutive readings on Thursday afternoon and was immediately sent to the National Palace. The new legislation was signed by President Luis Abinader after participating in the inauguration of a new park on the Malecón of the National District.
“In an international context marked by economic and financial uncertainty, it is necessary to adopt measures aimed at strengthening fiscal discipline, the sustainability of public finances and predictability in economic management, in order to strengthen the capacity of the State to respond in an efficient and timely manner to the changes and challenges of the national and international economic environment,” states the press release sent from the National Palace to make official the promulgation of the new tax reform.
The new legislation seeks to add approximately RD$50,000 million to the General State Budget through increasing the tax burden on various sectors of society and was presented as a solution to resist the effects of the crisis.
Only six days in the National Congress
With the approval in the Lower House, the anti-crisis plan culminated its journey of just six days within the National Congress.
The piece was introduced through the Senate of the Republic last Friday morning, so the president of the Upper House, Ricardo de los Santos, appointed a bicameral commission led by Senator Pedro Catrain along with ten other senators.
Last Wednesday, just five days after receiving the project, the senators urgently approved it with a series of modifications to articles 28, 37, 38, which establish the tax on lottery banks, the exemption of tariffs on fire trucks and ambulances, among others. The legislative proposal will go to the Chamber of Deputies, who after reading and knowing it, will decide its approval.
This despite the fact that the People’s Force senators voted against it.
Just the day after, deputies used the emergency procedure to approve the new law in consecutive readings.
“How good it would have been if the Social Security Law, which is 14 years late, had been approved in a (similar) period or if we had treated the Labor Code with this same process,” lamented moments before the vote the spokesperson for the People’s Force (FP) in that legislative body, deputy Rafael Castillo.
During the session held this Wednesday, the members of the Dominican Liberation Party (PLD) and FP benches presented more than 10 modification proposals. However, Pacheco, who said he spoke on behalf of the deputies of the Modern Revolutionary Party (PRM) and its allies, explained that they voted in favor of the opponents’ motions “because this implies that the project returns to the Senate.”
Christmas wage tax
The suggestions presented by the non-governmental legislators sought to solve “some aspects” contained in the legislative document on Measures for Economic Growth, Fiscal Simplification and Mitigation of the International Crisis. This was stated by deputy Carlos de Pérez, who assured that the Christmas salary tax, “the 13th salary”, would be aggravated with taxes.
In addition, he stated that article 50 of the initiative establishes an increase of two pesos per gallon of fuel purchased in the national territory, “in addition to the tariffs and amounts currently paid.”
“If we see it correctly, this reform will end up on the table and in the pockets of every Dominican because fuel is taxed, which makes everything more expensive,” he said.
Likewise, he asserted that liquefied petroleum gas will be aggravated with an increase in cost per metric ton of 174.
“Which means that turning on the home stove to cook and eat will cost a little more,” he said from his seat in the chamber.
De Pérez questioned that the Government, nor the PRM legislators, consider it necessary to exempt rice, beans, eggs and chickens in article 38 of the Transfer and Industrial Goods Tax (ITBIS).
“It seems to me that an exception should also be included because that is the Dominican flag,” he said.
The FP bench reiterated its request, led for months by Senator Omar Fernández, to fully adjust, “not halfway,” the amount of the Income Tax (ISR) to the annual inflation that the country currently has.
“Salaries are not indexed. We recognize that an improvement is made compared to what we have today, raising it from 34,000 to 39,000. If the cause that the government announced was the war in the Middle East and it disappeared, the most decent thing is that the project would have also disappeared,” said De Pérez.
While some deputies from the PLD bench supported some measures presented in the legislative project, since they describe them as “positive measures.”
“Such as the definitive elimination of the advance payment for microbusinesses, the 3% reduction of inheritance taxes between father and child and the special deduction of educational expenses for families that care for people with disabilities,” said deputy Ydenia Doñé.
