Key facts
- The Dominican government plans to implement new taxes to generate approximately $800 million in additional annual revenue.
- The proposed measures aim to offset the financial impact of a surge in oil prices, which the government attributes to the Iran war.
- Key proposals include a 30% income tax increase for three years on companies earning over $17 million annually.
- Other proposed taxes target airline tickets, casinos, gambling, and electronic cigarettes.
- Tax exemptions will be provided for micro-enterprises and individuals earning less than $680 per month to protect the most impoverished.
- The government has already allocated $350 million in fuel subsidies this year and estimates needing an additional $400 million if oil prices remain high.
The Dominican government is proposing significant tax increases to generate an estimated $800 million annually, aiming to offset the financial strain caused by a surge in oil prices, which officials attribute to the ongoing Iran war.
Key measures include a 30% income tax hike for three years on companies earning over $17 million per year, alongside new taxes on airline tickets, casinos, gambling, and electronic cigarettes. The administration also plans to impose customs duties on certain imports and enhance monitoring of items like cigarettes and alcoholic beverages.
To mitigate the impact on the most vulnerable, the government will exempt micro-enterprises and individuals earning less than $680 per month from these new taxes. The country, with a population of 11.6 million, currently faces a 17% poverty rate.
Dominican business leaders, represented by the National Council of Private Enterprise, have suggested that the government should instead focus on expanding the tax base by addressing the informal sector to achieve revenue growth without burdening existing taxpayers.
Currently, the government spends approximately $350 million weekly on fuel subsidies to shield the population from rising costs and curb inflation. Officials estimate that an additional $400 million will be required for the remainder of the year if West Texas Intermediate (WTI) crude oil prices persist between $90 and $100 per barrel.
Magín Díaz, the minister of finance and economy, stated that these "responsible decisions" are necessary to maintain stability, reduce debt pressures, and protect the most vulnerable from an international crisis beyond the nation's control. The proposed tax measures are slated to take effect in January 2027.