Tax dodgers bloom as Dominican rum-makers´ profits wither

Santo Domingo.- Rum distillerson Wednesday complain that alcoholic beverage-makers which evade taxes have raisedtheir market share by more than 200% in just two years, causing major revenuelosses, dwindling sales of those which pay all taxes, and harm the image ofDominican rums abroad.

The warning is from MarioPujols, executive director of Dominican Republic´s rum distillers grouped inAdopron, who blamed the situation mostly on higher excise taxes. He said aftersix reforms in 10 years taxes continue to rise and already top 60% in the caseof rum.

In a statement thedistiller also blamed the impunity he says benefits tax dodgers, whom he affirmssell as much as six times what they declare to the Internal Taxes Agency (DGII).

"Thenon-compliance on the part of unscrupulous companies, coupled with the failureto observe certain provisions in free trade agreements signed by the country, hasdrawn the attention of authorities in some markets, particularly in Europe,which has placed Dominican rum exports in a situation of risk," he said.

Pujols, speaking in theAmerican Chamber of Commerce forum "Illicit trade in DR: Causes,Consequences and proposals for its eradication," said he regrets that revenuethe government should obtain becomes profit for tax dodgers, whom he stressed alsocompete unfairly against companies that do pay taxes and whose products meet industrystandards.

“The illegality in thecase of rum resulted in a decline of 8% during the period from January toAugust.” Pujos said, adding that the reduction was 14% in the same period in 2014.