Reform on the way?

[NewsWhore]

Is a 2008 "fiscal reform" in the DR on the way? Fiscal reform in the DR is code word for tax increases. Hoy reports that the recent visit by the Managing Director of the International Monetary Fund, Murilo Portugal, could be indicative of more taxes. Portugal explains that all aspects of the nation's fiscal policies must be examined. However, Hoy also quotes Economic, Planning and Development Minister Temistocles Montas's new book "Where We Are Headed: Thoughts on Dominican Development", which suggests that as a country continues to grow, the tax base should be increased in order to create a more progressive tax base. Montas cites the Spanish example, which he says only had an 18.2% tax base in 1975, but increased this to 31.8% by 1985 and 35.1% by 2004. Montas argues that if the country maintained a fiscal deficit similar to the 2001-2004 periods, 1.83% of the GDP, with a growth rate of 2% and a real interest rate on debt of 6% public debt would inflate to 170% of the GDP. Increasing the tax base, nevertheless, could mean just getting more people to join existing taxpayers, not necessarily adding more taxes, or increasing the tax that existing taxpayers already pay.

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