Dominican Republic applies a rate of income tax corporate rate of 27%, one of the highest compared to multiple jurisdictions around the world. And at least 111 of the 164 analyzed, that is, 68% of the jurisdictions have lower rates than the Dominican Republic. For example, the average rate in the European Union is 17.5%, while economies that actively compete to attract investment—such as Singapore, Ireland, the United Arab Emirates or Switzerland—maintain rates between 9% to 17%.
The direct consequence of this differential is a lower competitiveness. Recent evidence, such as the Business Climate Index (ICE) of the Association of Industries of the Dominican Republic (AIRD), indicates that the tax burden It is repeatedly ranked among the main obstacles to business development in the country. In a global environment where competition for capital is intense, maintaining a relatively high rate limits the country’s attractiveness compared to alternatives with more favorable conditions.
The problem lies not only in the rate, but also in the complexity of the system, characterized by differentiated regimes, targeted exemptions and high compliance costs. This fragmented structure generates distortions, discourages formalization and makes long-term planning difficult. Moving towards a simpler, more competitive and predictable system would help strengthen the productive fabric.
A more competitive tax system does not imply lower revenue. On the contrary, by allowing greater investment, formality and productivity, the tax base is expanded and a sustainable, stable collection is built that is less dependent on pressures on a few formal taxpayers.
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A collaboration of the Regional Center for Sustainable Economic Strategies (Crees).
