Economy March 31, 2016 | 8:23 am

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Business sector’s ‘substantial’ tax breaks will be reviewed, Medina warns

Dominican Republic.- President Danilo Medina said Wednesdaythat in the next term in office a fiscal pact is one of the government priorities,including a "comprehensive" review of the “substantial” tax breaksfor business sectors.

He said the current tax system needs changing and redirectthose tax exemptions to economic activities which are more productive, avoidingunfair competition to strengthen the country’s competitiveness.

Speaking in the American Chamber of Commerce’s (AMCHAMDR)monthly luncheon, Medina stressed that the tax breaks represent as much as 7% ofGDP. "The Fiscal Pact will be a priority in a second term; however, I wantto alert you that we will not wait until the pact is signed to take measures toensure the sustainability of public finances.”

He said more than in any other Latin American nation, 94 ofthe country’s productive sectors get tax exemptions, compared with 66 inNicaragua, and only two in Chile.

The also presidential candidate of the ruling party (PLD) inthe May 15 elections said the Fiscal Pact should identify which sectors that nowget special treatment are willing to pay taxes. “This will let the state graduallyremove the tariffs from areas of great importance for development, which have ahigh tax burden even above the regional average, such as telecommunications.”

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