The economist Winston Mars explained that more than 420,000 Dominican workers are being affected by the lack of indexation of salary exempt from Income Tax (ISR)a measure established in the article 327 of the Tax Code which does not apply since the year 2017.
The law provides that the salary exempt from ISR must be adjusted in accordance with the Consumer Price Index (CPI) registered by the Central Bankas a mechanism to protect purchasing power against inflation.
Currently, the exempt salary remains at RD$34,685 monthlybut if legal indexation were applied, it would amount to RD$51,929according to recent calculations. This implies that a worker who earns RD$52,000 monthly you would be paying taxes for an approximate amount of RD$17,200 a yearwhich legally would not correspond to him.
“That money could cover a child’s educational fee or allow access to a broader basket of goods and services”Marte explained to the newspaper Today.
The economist estimates that the total amount that workers have stopped receiving due to this omission amounts to RD$5,000 millionresources that currently enter the State but that, according to the law, should remain in the hands of employees.
“These resources would help improve the standard of living of thousands of families and boost domestic consumption. It is advisable that the government comply with the law and apply salary indexation. It can do so by cutting other expenses, such as state advertising.”he added.
The lack of updating of the exempt salary has generated concern among tax experts, who warn that this situation erodes the real income of workers and contradicts the principle of fiscal equity.
