The Dominican Republic introduced a fiscal reform plan aimed at modernising its tax system and increasing revenue on 8 October 2024.

The reform is reviewing tax incentives for sectors like tourism and cinema, and it will introduce a new income perception system and mass audits to address tax evasion, particularly among those avoiding the 18% ITBIS tax.

The plan includes applying income tax and VAT to services provided from abroad, particularly via internet-based platforms, when used by consumers in the Dominican Republic. VAT exemptions for commercial and tourist lodging rentals through online platforms will be removed, except for housing rentals classified under the Dominican Civil Code. Revenues from e-commerce, including sales and technical assistance by foreign sellers to Dominican consumers, will be treated as Dominican-sourced income.

Additionally, VAT will be applied to low-value goods (LVG) imports, with a cost, insurance, and freight (CIF) value of USD 200 or less. VAT will be calculated based on the CIF value, including for non-commercial items.

Finance Minister Jochi Vicente announced that the reform would raise taxes on alcoholic and sugary beverages. The alcohol tax will increase to DOP 840 per degree of alcohol, and sugary drinks will be taxed up to 58 cents (USD 0.01) per 100 millilitres.

The government will expand the “Aliméntate” social programme by 21%, increasing payments to DOP 2,000 per month. Additionally, the minimum wage in the public sector will rise from DOP 10,000 (USD 167) to DOP 15,000 (USD 250) .

Infrastructure projects, including a metropolitan train in Santo Domingo and a monorail in Santiago, are part of the reform. Over 20,000 security agents will be hired, and 116 new police stations will be built.

The provisions will take effect upon publication, except for LVG regulations, which allow 120 days for implementation.