Dominican Government must tweak taxes to face risks: IMF
Santo Domingo.- The Dominican Republic will need an important fiscal adjustment to guarantee debt sustainability, given the risks created by policies of partner such as the United States, rising prices of oil, interest rates and the dollar.
The warning is from the International Monetary Fund (IMF) mission that was evaluating the Dominican economy during two weeks, which affirmed that the government has managed to improve its fiscal position, although high projected deficits for the consolidated public sector will generate pressures on the debt, as global financial conditions harden.
“The adoption of a robust fiscal framework for the medium term will ensure that annual fiscal policies are consistent with sustainability objectives,” the IMF said.
It said fiscal consolidation should be based on a comprehensive reform that broadens the narrow tax base, simplifies the tax system and makes it more equitable. “This should be accompanied by reforms to address the fiscal cost of the electricity sector and increase the efficiency of public spending.
The IMF said the country is in a strong position in the economic cycle.
It adds that the economy has been growing above its potential, reaching an average expansion of 7% of GDP in the last three years, while positive shocks on supply have contained inflationary pressures and strengthened the external position. “Growth will remain solid.”
Feb 14, 2017
Category: DR News |