Nassim Alemany criticized that the Government’s reform proposal only increases taxes or the base without establishing any incentive for informal workers to formalize themselves.
The economist Nassim Alemany He stated that with the tax reform project or Tax Modernization Project the Government “continues fishing in the fishbowl”, charging with more taxes or complicating the declaration of them for individuals or companies that already pay and does not include any element that leads to that there is greater formality in the economy.
“I believe that an opportunity was lost there, because one of the main problems that we have as an economic system is the level of informality and the level of arbitrariness that exists when doing business, whether it is done outside or if it is done formally.”, he expressed.
He indicated that, although he agrees with the Government’s approach that there be a frontal and forceful attack against elevation, but that is very difficult to do and that takes a lot of time.
He highlighted that countries that have implemented similar measures have been based on making it easy for the taxpayer and giving them the incentive to formalize it. “Because if not, you can’t fall behind two million people who make a bad affidavit. It is impossible, the Government does not have the resources or the human personnel to go after a person who was paid money and did not report it, that is very difficult to do,” he highlighted.
“I think there was a lost opportunity to incorporate more people into the system, not simply increase taxes on those who are already in the system,” he said.
Alemany cited as an example that the bill states that employees with salaries higher than the RD$624,329 annuals must make a sworn declaration of their assets and income once a year.
He said that this is only making the system more complex, because a person with only one job and their employer reports monthly how much they earn to the State. But with the Government’s proposal, an additional administrative procedure would have to be carried out.
“But those who are not reporting it now are not going to report it later, they are going to continue evading because the proposal does not change anything. Only the formal is being penalized, but at a time when more people should be involved in formality,” he explained.
He added that reducing the list of foods exempt from paying ITBIS would lead to increased prices for these products and would take away disposable income from households, especially the middle class.
In addition, he indicated that the Government proposes to remove all incentives from the productive sectors, but apparently a cost-benefit analysis was not carried out, and whether it will have an impact on the generation of investment. He said he hopes there is a space for dialogue because the reform is causing a lot of noise at a general level.
He emphasized that the reform submitted by the Government should not be called fiscal but tax because the only thing it concerns is pure taxes.
And if it were fiscal, it would include more things that affect the fiscal issue, such as the Central Bank debt and the issue of subsidy to the electricity sector, which greatly affects public finances.
