The adjustment of spending in the General State Budget for 2022 would be the palliative solution that the Government would apply for the moment, if the announcement by President Luis Abinader that a fiscal reform will not be submitted as contemplated is taken into account.
The Minister of the Presidency, Lisando Macarrulla, said yesterday that if there is any change in the budget project, it would be minimal. However, he indicated that, if made, these changes would go to spending.
From yesterday until next week, the budget is the subject of discussion in the government, according to Macarrulla.
The Minister of Economy, Miguel Ceara Hatton, explained yesterday that the Government will apply a policy of rationalizing public spending as much as possible by 2022 and will select the priorities to improve the quality of life.
In a television interview, Macarrulla also indicated that the government can identify legal instruments that are available to increase revenues without going through new laws, such as pending taxes from current legislation.
He reported that it is contemplated to make collections more efficient and administrative measures will be taken within the framework of the law to improve income.
Both Macarrulla and the head of the General Directorate of Internal Taxes (DGII), Luis Valdez, agreed that at some point a tax reform or pact must be made, which has been pending since 2015.
“It is a great sacrifice for the State and the Government. Sooner or later, the country needs a true fiscal pact that involves all sectors, ”said Valdez.
A month of yes, but no
On October 15, the Director General of Budget, José Rijo Presbot, assured that the reform was going “yes or yes this year.” It was given as a fact that in the next few days the proposal to be socialized would be announced and that the president himself would be in charge of presenting it.
Among the first to mention that a fiscal reform was being sought with a view to being carried out in conjunction with next year’s budget was the president of the Chamber of Deputies, Alfredo Pacheco.
On October 5, he said that the Legislative Power would be working on the study of the budget bill that the Minister of Finance, Jochi Vicente, and Rijo Presbot deposited on the first day of the month, while giving time for the Executive Power to reach an agreement. a tax reform.
He reported that both Vicente and Rijo Presbot, when they delivered the budget, informed the deputies that in October the government would be in the process of discussing a new fiscal reform, “readjustment” or “reorientation”. This would be introduced as an addendum to the submitted project, which must be approved before the end of this year.
In the meantime, the Association of Industries of the Dominican Republic (AIRD) warned that a “hasty” reform should not be known. Regarding this assertion, the Budget Director stated: “The fiscal pact should have been made on January 1, 2015, and we have been discussing the need for structural reform of the Dominican system for 18 years. This is not hasty, on the contrary, this is already very mature. The problem is that nobody wants to pay taxes here ”.
The budget project submitted on October 1 includes total expenditures for the Central Government for RD $ 1,155,565.3 million, of which a total expenditure of RD $ 1,046,280.7 million is projected and financial applications for RD $ 109,284.6 million.
The project document reports that, for 2022, preliminary estimates point to a gross financing need of RD $ 284,079.4 million, 4.87% of Gross Domestic Product (GDP), less than 4.95% of GDP budgeted for 2021.
This amount is made up of: financing requirements of the estimated global deficit result of RD $ 174,794.8 million (3% of GDP) and financial applications of RD $ 109,284.6 million (1.9% of GDP).
They would make exemptions more flexible
Although the tax reform is not working, a bill deposited on Monday is advancing in the Senate, approved the next day in first reading and sent to the Finance Commission for analysis. This was submitted by 29 senators so that a tax reform was not necessary, because it proposes to eliminate exemptions and exemptions to many sectors. Senators Alexis Victoria Yeb, Franklin Romero and Milciades Franjul revealed that they contemplate making some of the proposals more flexible.
