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Couriers protest taxation on Internet purchases under US$200

The Dominican Association of Courier Companies (Asodec) has described as illegal and irregular the 29 July 2014 notice from the Customs Agency stating that as of 15 August 2014 they will be taxing purchases made by Internet of goods costing less than US$200 that until now have been authorized to enter duty free. The notice was published in the media.

Asodec president Jose Burdiez said the announcement clearly violates Decree 402-05, the executive order that authorized that exonerated express shipments with values of less than US$200 from tax.

He said it was “outrageous” and “absurd” for Customs to seek to administratively modify an executive order. He quoted President Medina as saying that the privilege of importing goods costing less than US$200 was a right of the Dominican population.

Taxation on the goods had been included in the most recent 2012 tax reform law, but at the time this was challenged on the grounds that it was in violation of the DR-CAFTA free trade agreement.

Burdiez said that the announcement could mean consumers would see additional charges of 18-38% on their purchases. But this could be much more as it takes into consideration the 18% ITBIS tax and on average a 20% import tax, but not the luxury tax taxation into account.

Burdiez said that the taxation would cause enormous delays in express shipment services offered by the couriers.

At present, Internet purchases costing less than US$200 pay a Customs fee of 0.25 cents per kilo (2.5 lbs) of the import, explains Asodec.

Over the last few years more and more Dominicans have been making the most of the lower cost of Internet purchases, sometimes 200% less than what the goods are sold for locally. It remains to be seen if people would be buying the same goods locally if the US$200 tax exemption on purchases did not exist.

The National Organization of Commercial Businesses (ONEC), the association of mall and superstore owners in the Dominican Republic, has campaigned intensely for the elimination of the tax privilege on the grounds that the provision makes for unfair competition with stores that pay high taxes. ONEC had advocated for the government to allow tax-free shopping on consumer purchases up to US$200 in order to compete with the Internet purchases.

Speaking at a press conference called to inform on the Customs Agency notification, Burdiez stated that it is of great concern that the government favors business groups versus the common interest of Dominican consumers.

Yesterday, Wednesday 30 July 2014, Minister of Economy Tomas Montas told journalists that they should ask the Minister of Hacienda for information on the decision to tax courier shippers for imports under US$200.

Source: DR1, DGII

Category: DR News |

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Last updated October 26, 2016 at 10:54 PM
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