NewsWhore
08-11-2009, 05:10 PM
While current expenditures were down 7.7% for the first half of the year, capital expenditures, needed for economic growth, were down nearly 64%, as reported in Hoy. In large part, this was attributed to the 93% reduction in disbursements for government constructions. These figures do not include government arrears with electricity generators, estimated at US$700 million for all of 2009, nor does it include the debt the government has with other suppliers.
Part of the issue is the fact that there was a13.41% decrease in the tax collections during the first half, which in real terms meant RD$17.45 billion less in the Treasury. This decrease is attributed to the 21.3% decrease in Customs revenues, a 20.8% reduction in Treasury income and a 9.44% decrease in internal taxes (DGII).
For example, sales covered by the local VAT (ITBIS) fell by 16.45%, but collections of the VAT only fell by 0.62%. Again, in absolute terms, the distribution of the sales covered by the VAT was RD$60.16 billion, but the VAT tax collections only fell by RD$127.9 million, which, as interpreted by the DGII, means that tax collection was efficient.
Overall, ITBIS revenue is evidence of the economic contraction. This is so because both statistically and econometrically there is an evident correlation between GDP growth and sales-collections. Therefore, when the sales and collections increase, the GDP increases in the same proportion. This is why some economists doubt the 3% GDP increase estimated by the Central Bank for the first half, when ITBIS revenues have declined during this period.
According to Hoy, the analysts point out that there is still room to reduce ITBIS tax evasion. With an estimate that sales subject to ITBIS taxation was RD$305.59 billion in the first half of the year. This means ITBIS tax revenues should have been RD$48.89 billion and not the RD$20.57 billion that entered the Treasury, even when taking into account a small part of the ITBIS is returned to some businesses.
More... (http://www.dr1.com/index.html#4)
Part of the issue is the fact that there was a13.41% decrease in the tax collections during the first half, which in real terms meant RD$17.45 billion less in the Treasury. This decrease is attributed to the 21.3% decrease in Customs revenues, a 20.8% reduction in Treasury income and a 9.44% decrease in internal taxes (DGII).
For example, sales covered by the local VAT (ITBIS) fell by 16.45%, but collections of the VAT only fell by 0.62%. Again, in absolute terms, the distribution of the sales covered by the VAT was RD$60.16 billion, but the VAT tax collections only fell by RD$127.9 million, which, as interpreted by the DGII, means that tax collection was efficient.
Overall, ITBIS revenue is evidence of the economic contraction. This is so because both statistically and econometrically there is an evident correlation between GDP growth and sales-collections. Therefore, when the sales and collections increase, the GDP increases in the same proportion. This is why some economists doubt the 3% GDP increase estimated by the Central Bank for the first half, when ITBIS revenues have declined during this period.
According to Hoy, the analysts point out that there is still room to reduce ITBIS tax evasion. With an estimate that sales subject to ITBIS taxation was RD$305.59 billion in the first half of the year. This means ITBIS tax revenues should have been RD$48.89 billion and not the RD$20.57 billion that entered the Treasury, even when taking into account a small part of the ITBIS is returned to some businesses.
More... (http://www.dr1.com/index.html#4)