Dominican Republic raises tax on electronic transfers and checks to 0.20% this Friday

Santo Domingo.- A new 0.20% tax on the issuance of checks and certain electronic transfers will take effect in the Dominican Republic on Friday, July 3, under Law 30-26, which was approved by the National Congress as part of a broader package of fiscal measures aimed at increasing government revenue.

The tax rate, which rises from the current 0.15%, will be applied automatically by financial institutions to the issuance and payment of checks, electronic transfers to third-party accounts, payments to loans or credit cards held by another person, transfers involving joint accounts with third parties, and cash withdrawals made by third parties using ATM security codes.

Several transactions will remain exempt from the tax, including transfers between accounts owned by the same account holder, cash withdrawals made by the account owner, payments to government entities, social security and pension funds, and international transfers or transfers to brokerage accounts belonging to the same owner, provided the required proof of account ownership is submitted.

The measure is one of the key provisions of Law 30-26 on Measures for Economic Growth, Tax Simplification and Mitigation of the International Crisis, which the government expects will generate between RD$40 billion and RD$50 billion in additional tax revenue. The legislation is intended to strengthen public finances amid a challenging international economic environment.

Business organizations have expressed concern that the higher tax could increase banking costs for individuals and companies and potentially discourage financial formalization in some sectors of the economy.