[DR1] Tax the rich

[NewsWhore]

A report by the World Bank (WB) and the Inter American Development Bank (IDB) on poverty in the Dominican Republic suggests that the government has an area in which to create a new tax reform program which would imply widening the VAT tax base, a tax on interest earned on deposits of the wealthy and the strengthening of the collection of taxes through personal auditing. The document was developed by experts from the two international financial organizations in conjunction with the Ministry for Technical Affairs of the Presidency points out that the rich possess more than 50% of the uncollected income from the VAT exemptions. The report goes on to state that there is room to refine the last tax reform package further. The report also suggests looking at the income of self-employed individuals such as lawyers, doctors and accountants.


Other areas that the World Bank-IDB report looks at are the government subsidies for propane gas (LPG) and other social policies. The report says that 40% of the benefits of Promese (the medicine distribution program), Inespre (the food distribution program) and the LPG subsidy go to wealthy people, and only 20% go to the poor. The report recommends that the government focus on the very poorest and limit the subsidy to RD$250 per family per month. This would save the government 49% of its expenses, and increase the subsidy's social impact.

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