Prices of products will go up because of ITBIS hike
SANTO DOMINGO. The Directorate General of Internal Taxes (DGII) has already advised all Dominicans that starting on 1 January 2015 the Tax on the Transfer of Industrialized Goods and Services (ITBIS) increase from 11% to 13% for products such as coffee, water, chocolate, edible oils, yogurt and sugar will go into effect.
This decision will cause increases in the prices of those products of mass consumption in the Dominican Republic, starting in the first days of January or as soon as the merchants begin to transfer the increase of the ITBIS to consumers.
The DGII also advised that it would maintain at 18% the ITBIS rate for the other products taxed under this law, which would have gone down to 16% if they had achieved the fiscal goals that the government laid out in Law 253 – 12 for the Strengthening of the Capacity for State Collections.
But since everything is not bad in life, in the same communiqué in which the collection entity offers the negative news for consumers, they also reported about the reduction of the Income Tax for natural and judicial persons from 28% to 27%.
In addition, regarding what has to do with the increase of prices, thousands of consumers will be able to free themselves at least, in the month of January from paying the ITBIS increase, due to the fact that some commercial centers use this opportunity as a way of competing and to capture the greatest number of clients possible, have, over the last 2 years, absorbed the increase in this tax.
Last year the National Organization of Commercial Enterprises (ONEC) reported that a large number of the commercial centers who are a part of this entity would not apply the increase of the ITBIS, which went from 8% to 11%.
On this occasion, in which the tax will go from 11% to 13%, the Ramos Group has already reported to all of its clients that they would assume for the month of January the scaled up increase of the ITBIS set forth in the 2012 tax reform.
“The Ramos Group, through its brands of La Sirena, Super Pola and Aprezio, announced that it would assume for the 3rd consecutive year in January the increase of the ITBIS established by Law 253 – 12 on several articles of mass consumption,” says the official communication which was released yesterday.
In addition, they note from the Ramos Group explains that through this measure their clients will not be affected during the first month of 2015 by the increase from 11% to 13% in the ITBIS which will affect food products such as regular sugar, soy, corn and vegetable oil, coffee, cocoa in powder, chocolate bars, butter, margarine’s and yogurts, which will represent an important saving for consumers, reported the commercial firm.
According to executives from the Ramos Group, the measure will benefit thousands of clients that daily visit the 24 multi – centers of La Sirena, the 7 Pola supermarkets and the 11 Aprezio discount stores which operate in the principal geographical areas of the country, who in addition can enjoy great specials on many other products of the family food basket.
“Since the start of our operations we have tried hard to serve our clients and offer them on a consistent basis through our brands and different business formats, valuable alternatives which respond to the trust that they have deposited in us,” indicated Juan Diaz, the director for Grocery Buying for the Ramos Group.
In addition, the executive reaffirmed the company’s commitment with Dominican society and assured reporters that during all the year, the Ramos Group will continue developing offers and promotions which contribute to making the life of their clients more practical and happy.
Last year, the establishments which belong to the CCN Group, as well as the Bravo Supermarkets also announced that they would assume the ITBIS increase, so their clients expect that they will do the same thing on this occasion.
But in spite of the decisions of the principle commercial establishments of the country to take on the increase of the ITBIS, different commercial organizations asked the government to rescind the measure which makes the increase of this tax go into effect.
The President of the Confederation of Supplies and Pymes Merchants, Gilberto Luna, said that with the reductions that have taken place in the prices of the fuels these last few months the government has saved a great amount of money which was not foreseen coming into the economy, so that he understands that they should lower the ITBIS from 18% to 16% just as established by Law 253 – 12 and leave the scaled increase of this tax without effect on the products which before the tax reform were not even taxed.
“The government has to start thinking about something so that the consumers and the people benefit from what is happening in the economy because oil now costs around $50 and the government is saving a huge amount of money on its oil bill and a lot of money is entering the economy from the laws which have been created, so why doesn’t the government collaborate with consumers and rescind the application of the expansion of the tax base now that more money is coming in,” said the merchant.
DR could have savings of US $1.2 billion
The Central Bank reported through their webpage called Open Page that the savings which the Dominican Republic from could have due to the reductions of the price of a barrel of oil, could be US$1.2 billion. “After the statements by the Governor, the IMF revised its average oil price projection to US$72 a barrel, increasing the potential savings of hard currency for the Dominican economy of both the US$1.2 billion for the coming year,” says the Central Bank report, which makes reference to the first savings projection which was US $600 million.
Category: DR News |