The Ministry of Finance is still thinking about applying the pending or expressly delayed aspects of the 2012 tax reform.
When the governing entity of fiscal policy analyzes the need to provide the treasury with greater collections, it starts from “the possibility of executing policy measures that were pending application of Law No. 253-12 on Strengthening the Collection Capacity of the State for Fiscal Sustainability and Sustainable Development”.
This is how it is consigned in the Mid-Term Budget Execution Report January-June 2022” posted on the page of the General Budget Directorate. The document contains an analysis of the Macroeconomic Context and Economic Outlook, which states that the year 2021 marked the beginning of the global economic recovery after the recession of the previous year caused by COVID-19. In this sense, it mentions that the aforementioned year closed with a world economic growth of 5.9%. However, with the outbreak of the war between Russia and Ukraine, in February 2022, a new scenario of high uncertainty and eventual global economic contraction opens up, fading the hopes placed on an immediate post-pandemic recovery. And it is that both countries involved in this conflict produce a significant proportion of raw materials demanded around the world, highlights the official document.
At the local level, it exposes the “Public Policy Priorities”, indicating that for the year 2022, the General State Budget (PGE) was consistent with the objectives established in the National Development Strategy (END) 2030, as well as with the formulation guidelines for the National Multi-year Plan for the Public Sector 2021-2024 and the Government Plan 2020-2024.
It says that “the preparation of the 2022 General State Budget proposed a refocusing of public priorities” and that “this implies an improvement in public services (water, electricity, health, education, citizen security, access to justice, among others) , that the conditions be created to generate quality jobs and generate more opportunities for all people, without distinction. In addition, it seeks to build a more effective and efficient State, a productive apparatus capable of generating more foreign currency and a socially and territorially more cohesive, inclusive and supportive country.
The document indicates that the efforts of the tax administration, and the higher revenues expected for the year 2022, would be additionally based on the possibility of executing policy measures that were pending application of Law No. 253-12 on the Strengthening of the Tax Collection Capacity of the State for Fiscal Sustainability and Sustainable Development, dated November 9, 2012”.
The measures that have the attention of the tax authorities are not cited. Among the tax figures approved in Law 253-12, the vehicle circulation tax (plates) based on 1% of the value of the vehicle, nor a tax amount of RD$5,000 on retail trade, have not been applied.
Efficiencies would give better collections
The MH document states that in order to achieve these objectives, the PGE 2022 proposed continuing the measures to increase the administrative efficiency of the General Directorate of Internal Taxes and the General Directorate of Customs. Among the measures planned to increase the collection capacity, the following can be mentioned: Greater speed in expanding the coverage of electronic invoicing, continuing with the design of the risk profile of taxpayers, perfecting the collection system, based on flexibility and the use of computer tools and combat treasury fraud.
