Verizon Dominicana - Capital Gains

[DR_Tolete]

Interesting article on US Congressmen expressing their disatisfaction with the DR trying to collect capital gain taxes from the Verizon sale.

El Nacional, la voz de todos

As I'm sure we have IB and M&A guys here, I'm interested on your take on this. Should the DR stand firm (we're talking about USD 500 million) and collect capital gain taxes?

Thanks.

[bienamor]

I thought that this had been setteled via the Tax agreement between the DR and Canada, same for FalconBridge. Both were owned, and sold by Canadian incorporated companies. INDOTEL at one time prior to the tax argument from renta internal had agreed to the sale.

[arturo]

Originally Posted by DR_Tolete

Interesting article on US Congressmen expressing their disatisfaction with the DR trying to collect capital gain taxes from the Verizon sale.

El Nacional, la voz de todos

As I'm sure we have IB and M&A guys here, I'm interested on your take on this. Should the DR stand firm (we're talking about USD 500 million) and collect capital gain taxes?

Thanks.

As I see it, the DR has two primary choices:

1. The all too familiar "don't look past the next quick buck" mentality that is shared by too many segments of Dominican society, from the highest levels of government who sell out the people to narco and and environmentally hostile foreign interests to tourist zone taxistas who will turn down market rate offers for fares for days on end in favor of sitting idly waiting for the chance to rip off an unsuspecting tourist.

2. See the bigger picture of growing foreign investment to give the economy a sustainable long term lift based on earning the confidence of the international investment community by standing by established agreements.

Some may wonder what could possibly outweigh half a billion US dollars. There is a short two word answer that is, IMHO, taken for granted far too often: foreign aid.

Funny how seldom those two words come up when local demagogues are excoriating foreign diplomats for voicing the frustration of their citizens over some of the games that are played with property rights and contracts.

[Market Economy]

This is an unfortunate issue that does not bode well for DR as it may turn away future foreign investments. But as I see it, it is in a standstill currently.



Note: This is my personal opinion, an should not constitute investment
advice. E-mail me at my personal address if you want to develop a dialogue.