The Minister of Finance, José Manuel –Jochi– Vicente, today presented a series of adjustments as part of the proposal for Tax Modernization Lawwhich highlights the elimination or modification of tax incentives that had been in force for decades for various sectors of the economy.
During the presentation at LA Weekly with the PressVicente stressed that many of these exemptions, initially created to support emerging sectorsare no longer necessary and, in some cases, have generated economic distortions.
From the National Palace, Vicente explained that the tax incentives They were designed to help companies establish themselves or offset certain initial costs while achieving profitability, for a certain period.
“We cannot continue affording ourselves the luxury of losing revenue from the wealthiest sectors”Minister of Finance
Obsolete incentives that propose eliminating
“Specifically, the preferential tax treatments to the tourism sector, to cinema, to industry, to the textile chain, those related to trusts and those related to the patronage law,” Vicente announced on behalf of the government.
Likewise, he pointed out that the Itbis Bonus and certain exemptions for trusts oriented to low-cost housing projects will be maintained due to their importance in the development of that housing segment, which is a strategic axis of the government.
“It is extremely difficult to justify the permanence of a law for a given sector for periods longer than 10 or 15 years,” said the minister, referring to laws such as Comfort (2001), of Cinema (2010) and of Border Development (2001).
The analysis carried out by the government determined that many of these incentives have met their objective and, therefore, it is no longer necessary to maintain them. “Some incentives do not need to be maintained and others will be adjusted,” Vicente stated.
Regarding incentives for free zones will undergo modifications. Free zone park operating companies, which act mainly as property lessors, will see their tax benefits restricted, Vicente said.
On the other hand, he explained that the companies free zones that sell to the local market They will be able to choose between submitting a sworn declaration of the profits from said sales or paying 5% as presumptive income tax. “This scheme will also apply to logistics companies,” he said.
Changes in the Border Development Law
The Border Development Law will be modified to ensure that only those projects that represent a minimum investment of 5 million dollars and that maintain a payroll of at least 100 permanent employees in the border region benefit from their incentives, Vicente announced.
With this adjustment, the government seeks to avoid the misuse of these incentives and guarantee that investments in border areas have a real impact on job creation, as detailed by the Minister of Finance.
Another important adjustment that the official mentioned was the limitation of the exemption on taxes on fossil fuels. This exemption will only apply to companies that sell energy to the National Interconnected Electricity System (SENI), which seeks to rationalize the use of this type of incentives and promote the use of cleaner energy.
The minister concluded his presentation by highlighting that all sectors of the economy They must contribute equitably to public finances.
“We cannot continue to afford lose the collection of the wealthiest sectors,” said Vicente, insisting that this reform is crucial to guarantee healthy fiscal accounts and a fair distribution of State resources.
