Government proposes tax increases and removal of exemptions

Santo Domingo.- The Dominican Government has announced a tax adjustment aimed at generating RD$122,486.6 million annually to fund various projects, including citizen security, the Integrated Transportation System, local government services, Central Bank recapitalization, health care improvements, and reducing the fiscal deficit in the energy sector.

Key Measures for Increased Revenue

To achieve this, the government plans to remove tax exemptions in the tourism and film industries and increase taxes on alcoholic beverages, sugary drinks, and vehicle registration stickers. Additionally, digital platform services will be taxed under a revised Value Added Tax (VAT) system, which replaces the existing ITBIS. Essential products in the basic food basket, such as rice, bread, chicken, and milk, along with educational and health services, will remain exempt from VAT.

Details on New Taxes and Exemptions

Alcoholic beverages will see a higher tax, with the specific tax on alcohol content rising to RD$840 and the ad valorem rate increasing to 11%. Sugary drinks will be taxed based on their sugar content, while vehicle registration will cost RD$3,000 for cars older than five years and RD$6,000 for newer models. Electronic cigarettes will face a 20% import tariff and a 75% ad valorem rate. For property owners, the minimum exemption for the Real Estate Tax will be set at RD$5,025,380.75, and a 1% rate will apply to property values exceeding this threshold.

Source: Listín Diario