World Bank: Time to strike Dominican Republic’s tax break morass

Santo Domingo.- The World Bank (WB) and the French Development Agency (AFD) said the complexity of the Dominican tax code “and the uneven history of its application on certainly very narrow tax bases” has caused large or established companies to have unfair advantages over others, something that, at the same time, has weakened the efficiency and progressiveness of the country’s tax structure.

“Tax expenditures should be viewed as a top reform priority, because the DR’s elaborate system of exemptions, deductions, tax ‘holidays’ and other incentives favors established businesses, and removing these policies would boost revenues while it would encourage competition and level the playing field,” said the multilaterals in their most recent report,” Dominican Republic, public spending review.”

The tax exemptions, which especially benefit free zones, the electricity sector, tourism and mining, are governed by 39 different tax regulations.