Tax Reform Proposal in the Dominican Republic Promises Economic Boost

Miguel Collado Di Franco, Executive Vice President of the Regional Center for Sustainable Economic Strategies (CREES), has proposed a new tax reform in the Dominican Republic. He predicts a 1.5% increase in GDP collections in the first year of implementation.

The proposed reform aims to lower taxes, which, according to Collado Di Franco, will lead to increased collections from the outset. He cites the success of the 1992 tax reform, where collections doubled in the third month of implementation, and the Income Tax rate was reduced from 46% to 25% within three years.

Collado Di Franco emphasized that the current environment is different, with a more capable tax administration. He stated, "Lowering taxes collects more from the first moment." He insists that the CREES proposal guarantees the government an increase of up to 1.5% of GDP in the first year, a conservative estimate.

Why this matters: The proposed tax reform in the Dominican Republic has significant implications for the country's economy and fiscal policy. If implemented, it could lead to increased government revenue and economic growth, which could have a positive impact on the country's development and citizens' standard of living.

The tax reform must be discussed and approved to come into effect with the 2025 Budget. Collado Di Franco highlighted the need for immediate action, urging approval for implementation with the 2025 budget. He noted that the proposed reform has the potential to increase the Tax Pressure between 1.3 to 1.5% in the first year.

President Luis Abinader has already begun to socialize the proposal with different sectors of national life. The expansion of the tax bases is expected to facilitate the increase in collections, emphasizing the need for immediate action.

The proposal is contrasted with the previous reform 253-12, which did not achieve the same level of success. The current proposal is seen as more viable on account of the improved capabilities of the tax administration and the lessons learned from past reforms.

To recap, the proposed tax reform by Miguel Collado Di Franco aims to boost the Dominican Republic's economy by increasing GDP collections by 1.5% in the first year. Citing the success of the 1992 reform, he urges the government to approve the proposal for implementation with the 2025 budget.

Key Takeaways

• Miguel Collado Di Franco proposes tax reform to boost Dominican Republic's economy.
• Reform aims to lower taxes, increasing collections by 1.5% of GDP in the first year.
• Success of 1992 tax reform cited, where collections doubled in 3 months.
• Proposal must be approved with the 2025 Budget for implementation.
• Reform expected to increase Tax Pressure by 1.3-1.5% in the first year.