Dominican Republic Introduces Tax Reform
The Dominican Republic's government, through the Ministry of Finance, has introduced a new tax reform proposal that includes a specific tax on gambling. According to Finance Minister Jochi Vicente, the initiative aims to increase tax revenue as part of a broader fiscal reform effort.
The proposed reform includes several key measures:
1. Increase in Gambling Tax: The government plans to raise the withholding tax on gambling winnings for businesses from 25% to 27%. This measure is intended to boost revenue collection in a sector that has seen significant growth.
2. New Selective Gambling Tax: A new selective tax on gambling activities is expected to generate approximately DOP 1.512 billion (around USD 25 million). The government believes expanding selective taxes is an administratively feasible way to increase fiscal revenue in the short term. This is in line with trends seen in other countries that often expand broad-based consumption and selective taxes when reforming their tax systems.
3. Elimination of Import Exemptions for Gambling Machines: The project also proposes eliminating the current exemption on the importation of gambling machines and related equipment, further increasing the tax base.
The overarching goal of these measures is to improve the country's tax collection, reduce evasion, and make the system more accessible to taxpayers. "To bring our tax revenue levels closer to those of other countries in the region, it's essential to conduct a comprehensive reform that increases revenue, reduces tax evasion, and makes the system more accessible," states the document outlining the fiscal modernization law.
Finance Minister Jochi Vicente emphasized that the purpose of the fiscal modernization project is not to negatively impact any particular sector but rather to foster the overall development of the country and strengthen the economy in the long term.
