Economy November 23, 2016 | 2:37 pm

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Industry leader calls 50% VAT tax in advance, unacceptable

Santo Domingo.- Herrera and Santo Domingo ProvinceIndustries (AEIH) president Antonio Taveras on Wed. called the notion that thepaying 50% ITBIS (VAT) tax in advance at Customs won’t have major negativeimpacts on small and medium-sized businesses, unacceptable.

he said the country’s future fiscalsustainability is is cause for serious concern, because in his view, "the governmentlashing out blindly for not daring to seriously propose a major tax reform,accompanied by deep and structural institutional reforms."

"The fatal outcome of this measure"he said, will be a de-capitalized business fabric that generates more jobs inthe economy, contributing significantly to GDP, macroeconomic stability andsocial peace.

"We want to call on president DaniloMedina’s government to reflect on the measure of collecting 50% of the ITBIS inadvance on raw materials and machinery in Customs, because this could slow theprogress of SMEs, which are a fundamental part of the strategy of his own administration," the business leader said.

He defined as painful that the government doesn’twant to understand that the measure will greatly jeopardize the industrial sector,which transforms raw materials and adds value, to obtain a final product thatraises the country’s wealth, contributes with more jobs and helps to mitigatepoverty.

"With this measure many small companieswould be de-capitalized, because they will pay an ITBIS in advance that theywould hopefully recover in six months, but worse, we could be witnessing adestruction of wealth and jobs in a country with so much crime," Taverassaid.

He said keeping the measure will increaseunemployment because many small and medium-sized companies that have liquidityproblems would have to close. "It would also be an inflationary measure,since many companies, in order to survive, could pass this cost on to the finalproduct."

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