Taxes not to be removed as planned

[NewsWhore]

Gradual reductions in taxes approved earlier this year when the tax levels were raised from 25 to 30%, and the tax on financial transactions, pegged at 0.15%, will not be removed or changed as had been planned, Diario Libre reports in an advance on the new fiscal reform that will be presented to President Fernandez today. Once the President reviews the fiscal reform package it will be passed on to IMF representatives for their review. The income tax rate was to have fallen by a total of five percentage points by the year 2009 and the tax on financial transactions was to have been completely eliminated by the year 2009, but the fiscal reform and the government's need for an extra RD$18 billion will not allow for these taxes to be removed or reduced. Presidency Technical Minister and the government's chief economic advisor Temistocles Montas said that the new fiscal reform is promising the affect the health and education budgets. Montas continued defending the reform by saying that it is not a tool that would allow the government to increase spending, but rather a mechanism used to reduce public spending. Montas did however point out that this would be the last fiscal reform by the current government and that it would affect the lives of the country's poorer citizens as little as possible. Montas is also quoted in Hoy newspaper as saying that the reform is needed because the government currently uses 30% of its revenue to pay off foreign debt and that this problem, which needs to be fixed, was created by the former PRD government. He says that the government spends RD$65 billion on foreign debt as opposed to only RD$190 billion in revenue. Montas made these comments on the TV show "En Una Hora."

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