Collecting taxes for internet purchases: “illegal” and “strange”
SD. In internet purchases for a maximum of US$200, some half a million Dominican take part, according to estimates by the Dominican Courier Association IASODEC).
According to Jose Burdie, the president of the entity, these imports done basically by individuals for their own consumption, represent US$100 million a year. “This is not even 1% of the imports,” he estimated.
This market is in the midst of a battle with the big stores that make up the National Organization of Commercial Enterprises (ONEC) which calls these purchases “unfair competition.”
After an intense media campaign by the ONEC urging taxation on Internet purchases, on Wednesday the Director General of Customs (DGA) announced that it would do so starting 15 August.
This “administrative” measure goes against article 4 of Decree Num. 402-05, issued by President Leonel Fernandez on 26 July 2005, which stipulates that the packages with a value of less than US$200 are “free from payment of duties and tariffs.”
On Wednesday morning (yesterday), a reporter from Diario Libre visited the DGA in order to request a copy of the alleged new decree that annuls what is stated in 402-05. In spite of insistence on the part of the reporter, no such document was produced, and the person in charge of the press said that he did not know if it existed. He asked for the reporter’s phone number and said that the director general of Customs, Fernando Fernandez, would be at a public activity on Thursday (today) where he would answer questions.
During the press conference, Burdie called the supposed measure by the DGA “unheard of” and “abnormal”, since in a “purely administrative” manner they pretend to modify the express mandate of a decree. He called this “illegal” and estimated that the tax load for consumers would be in the order of 18% to 38%.
On 9 July, the ONEC sent a public letter to President Danilo Medina, signed by 21 business organizations in which they ask for the elimination of the tax exemptions on companies “that operate outside the territory, that do not create jobs or contribute to the national economy and development.”
At that time, Ernesto Martinez, who heads ONEC, seems to have foretold the controversial measure by the DGA. He said that pending decisions would be taken “that correct once and for all the serious distortions that are involved in the application of decree 402-05 that allows a general tax exemption to companies that operate outside the country.”
In the framework of the 2012 tax reform, in which the internet sales below US$200 were taxed, President Medina was forced to send a legislative proposal to the Congress in order to eliminate this tax. In the middle of the rejection by society of this tax, the President said, “t
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