Government could lose RD$6 billion

[NewsWhore]

The Minister for Economy, Planning and Development, Temistocles Montas, has defended the government's plan to reduce taxes on selected items such as beer, rum, and cigarettes, as well as on other items subjected to a Selective Luxury Tax. Additional taxes levied in January 2007, had a negative effect on sales, as beer and cigarette companies had warned. According to Montas, if current taxes are maintained, the government could face a loss of up to RD$6 billion in expected tax revenues. As well as the decrease in tax income, Montas also said that the government led by Leonel Fernandez does "not want to create difficulties for the productive sector." The positive effect on reducing smoking aside, the government is concerned for its pocket. As reported in Hoy newspaper, the minister now has admitted that the most recent tax revision went a little bit too far in applying a 100% ad-valorem tax on cigarettes. President Fernandez will address the nation early this week and is expected to announce exactly which measures will be sent to Congress for approval. The decline in beer sales hit home when the Presidente-producing company announced the cancellation of the Presidente Latin Music Festival this year.

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