Economy minister Temístocles Montás admitted that increasing taxes on cigarettes, beer and rum was a mistake, highlighting the need to modify the tax hike. President Leonel Fernandez will send a proposal to Congress after the chief executive’s speech on Monday or Tuesday.
Sales on those products fell considerably after the tax increase which could mean a RD $6 billion loss in Government revenues in fiscal terms, Montás said.
Though the official did not provide details on the tax exemption proposal the different productive sectors have requested, he said the proposals to modify the "fiscal rectification" were discussed with the International Monetary Fund’s delegation. Montás said the decision to lower taxes on those products is not a result of the government receiving insufficient revenues, and cited the Internal Taxes Agency by asserting that "income in the first months of the year has been excellent. But in the measure in which we have evaluated the situation we have found that although Government income has been excellent, “we have noticed important falls in the sales of beer and cigarettes."
The government does not intend to become a factor that generates "difficulties to those productive sectors," Montás said.