Manufacturers protest new 9% ITBIS tax in 2017 budget
Industry and business sector representatives in the Dominican Republic are calling on the government to eliminate taxes on raw materials. The tax is included in the 2017 National Budget and will be approved when the ruling PLD party passes the budget sent by the Presidency. Manufacturers say that the proposed 50% ITBIS tax on raw materials or 9% ITBIS, industrial machinery and capital goods would affect these companies.
As proposed, the tax would override tax incentives authorized by the ProIndustria Law for small and medium-sized industries, exporters and producers of tax-free goods.
Dominican Republic Industries Association president Campos de Moya and executive vice president Circe Almanzar said that the country’s juridical security, investment climate, production and national exports, and jobs are also at risk. They are advocating for legislators to eliminate the measure before passing the 2017 budget.
They appealed to President Danilo Medina to submit an amendment to the bill.
The AIRD says that Dominican companies will be at a major competitive disadvantage with imports coming from DR-CAFTA members that do not have to pay a similar tax in their countries. Circe Almánzar said this would lead to more local manufacturers leaving the country to depend on imports.
Almánzar says the new tax would be a “big blow” to manufacturers.
Issachar Burgos, president of the Confederation of Small and Medium-sized Companies (Codopyme) said the measure would not increase government collections, but would affect the cash flow of small companies.
The Dominican Exporters Association also expressed concern about the measure proposed in the 2017 national budget bill that would charge 50% of ITBIS or 9% at present on imports of raw materials, machinery and capital goods used by manufacturers.
In a press release, Adoexpo president Álvaro Sousa Sevilla says that the measure would eliminate the rational facility that currently allows manufacturers to pay the ITBIS at the end of the productive process. According to Adoexpo, this will affect export sector competitiveness and limit the cash flow of exporter companies, saying that it would strip their assets. In the Dominican Republic, companies need to pay the ITBIS tax before receiving the revenue from the sales.
Source: DR1, Hoy
Oct 7, 2016
Category: DR News |