The Association of Savings and Credit Banks and Credit Corporations (Abancord) today expressed its concern about the tax burden that the tax reform project, currently under discussion, would impose on savers through the interest generated by their deposits.
The president of Abancord, Cristina De Castro, warned that a tax of this type could discourage savings, negatively affecting the country’s economic growth.
“The savings of our citizens represent the foundation on which investments that promote sustainable development are built. A tax on interest, which already pays 10%, discourages this essential practice for the Dominican economy,” said De Castro.
The president of Abancord added that savings are essential to strengthen the financial system and, ultimately, boost investment and job creation in the country.
Abancord recognized the environment of dialogue that has been promoted by the Government and Congress, and expressed optimism regarding an eventual review of the aspects that could have an adverse impact on the economy. He raised the need to take advantage of the moment to carry out a comprehensive reform.
He drew attention to the potential impact of the proposed tax reform on the quality of the financial system’s credit portfolio if the cost of living rises and clients have difficulty repaying their loan commitments.
“We trust that, in the public hearings and the discussion process in Congress, the elimination of measures that discourage savings will be considered. We believe that a tax reform should focus on strengthening financial inclusion and facilitating access to banking services for all citizens,” said De Castro.
The Association reiterated its willingness to collaborate in this process, providing technical arguments, based on knowledge of the financial sector, especially for the protection of the savings and pockets of clients at the base of the pyramid that make up the portfolios of our managed entities. to microcredit, to avoid a return to the informal economy, after the great effort deployed by our entities for their financial inclusion.
“We hope that the tax reform is an instrument to encourage savings, not to penalize it, and that an environment of stability and prosperity is guaranteed for Dominicans,” he concluded.
You can also read: cONEP: Although “no one wants to pay more taxes”, tax reform is for the “growth” of the country
