The tax reform would make an economy more expensive, less competitive and with the same fiscal deficit, maintains CREES
The fiscal deficit in 2025 would remain the same with the tax reform: close to 3% of the gross domestic product (GDP), stated the Regional Center for Sustainable Economic Strategies (CREES).
In an analysis posted on its website titled “Increase costs and reduce the productivity of the economy for this?”, CREES maintains that the tax reform would make an economy more expensive, less competitive and with the same fiscal deficit.
He explains that the Government’s fiscal deficit for next year with the tax reform would be RD$235,910 million.
He maintains that the Fiscal Modernization law would make the costs of living and doing business in the country even more expensive, and would not achieve one of the objectives for which it is promoted: reducing the rate of indebtedness.
He recalled that the Government seeks to increase collections by more than RD$122,000 millionwith an increase in spending of more than RD$110,000without including increases in the Aliméntate program and in the minimum salaries of public employees.
He believes that the savings that could be achieved through mergers and eliminations of state entities would not be savings.
He pointed out that households will be impacted by the expansion of the ITBIS or VAT base to one of the highest rates on the continent: 18%.
He considered that taxing sales at a higher rate is equivalent to an increase in income tax.
Eliminating exemptions for specific industries, without making a reduction in tax rates and simplifying the tax system, will be a blow to the competitiveness of the economy.
