Here is a little information to consider related to the new tax reform that is proposed.
The new tax reform in the Dominican Republic, set to take effect in January 2025, is a significant overhaul aimed at increasing tax revenues by 1.5% of GDP. The reform, known as the Fiscal Modernization Project, will fund public services, infrastructure projects, and social programs while addressing the country’s fiscal deficit.
Key aspects of the reform include:
1. Removal of Tax Exemptions: Exemptions for sectors like tourism and film will be eliminated, leading to increased tax contributions from these industries.
2. New Taxes on Beverages and Vehicles: Taxes on alcoholic beverages will rise, with a specific tax on alcohol content and an ad valorem rate of 11%. Sugary drinks will be taxed based on their sugar content, and vehicle registration fees will increase, costing RD$3,000 for older cars and RD$6,000 for newer ones.
3. Real Estate Tax Changes: The exemption threshold for real estate tax will be set at RD$5,025,380, with a 1% tax on property values exceeding this amount.
4. New VAT Structure: The reform will revise the Value Added Tax (VAT), replacing the current ITBIS system. Digital platforms and online services consumed in the Dominican Republic will now be taxed, closing a significant gap in the current tax system   .
This reform is designed to improve public infrastructure, boost healthcare, and reduce the fiscal deficit, with a focus on long-term economic growth and sustainability. It will also significantly impact businesses and individuals, particularly in sectors that previously enjoyed exemptions or lower tax rates.
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