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Daily News - Thursday, 31 May 2007

Fernandez's tax reductions
President Leonel Fernandez has submitted three bills to Congress aimed at reducing income tax, as well as the taxes on alcoholic beverages and tobacco, and granting amnesty to people or businesses that have not paid their ITBIS (VAT) tax to date. The new bill also proposes an income tax (ISR) exemption for businesses with sales up to RD$257,280. Companies that make between RD$257,280 and RD$385,920 would pay a 15% tax and the ones that make between RD$385,920 and RD$536,000 would pay a 20% tax. Companies selling above that level would be required to pay a 25% tax. Income tax for households would also be reduced from the current 29% rate to 25%. If the bill is passed, alcohol would then be subject to a 7.5% ad valorem tax, instead of the current 20% and tobacco products would pay a 20% ad valorem tax, as apposed to the current 100% tax. National Business Council (CONEP) president Lisandro Macarrulla says that the proposed tax reductions would allow for more competitiveness in the productive sectors. Speaking on the other proposed bills, Macarulla says that the business sector usually opposes amnesties for people who haven't paid taxes because it serves as an incentive for tax evasion. The Association of Beer Producers (ADOFACE) welcomed the President's initiative. Hoy quotes ADOFACE executive director Ana Ysabel Acosta as saying that once the bill is passed there would be a decrease in the price of beer, which will be passed on to the consumer. This is expected to result in an increase in beer sales.

Government tax surplus
The government has had a mega surplus in the first four months of the year, compared to the budgeted amounts for the period. El Caribe reports that the Treasury (Hacienda) Ministry's economic studies department shows tax collections accumulated through 18 May amounted to RD$85.05 billion, that is RD$6.82 billion (8%) more than the RD$78.23 billion estimated for the period in the National Budget. Interestingly, in the first four months of the year, the government had already spent 43.8% of its total budget.
Exports were up this year, reflecting the increase in the valorization of ferronickel exports, that were up by 132%. Total exports for the first quarter of the year were US$1.61 billion, up by 8.1% compared to the same period last year.
The Treasury Ministry also reports that money in circulation increased by RD$5.55 billion through April.

ANJE on proposals for tax cuts
The president of the National Association of Young Entrepreneurs (ANJE), Joel Santos has hailed the decision to postpone the Family Health Insurance (SFS) and cuts in some taxes, as announced to the nation by President Leonel Fernandez on Tuesday. However, he went on to criticize the President for not touching upon a possible reduction in superfluous government spending, as many business organizations and independent technicians have requested. Santos said that when the government pushed for the significant tax increases implemented in January 2007, it committed to reduce its spending.
As reported in El Dia, Santos said that the current situation is an excellent example of how a tax increase can backfire and end up generating less tax revenue for the government. He said that the government should look into revising the ITBIS (VAT) and income taxes, with the aim of integrating more taxpayers into the system. Santos considered that the fiscal amnesty would result in the integration of more taxpayers to the system.

Alburquerque: SFS in 90 days
Vice President Rafael Alburquerque is guaranteeing the official entrance of the controversial Family Health Insurance plan (SFS) in 90 says and says that the three-month period gives them enough time to settle any remaining differences about the plan. Alburquerque was appointed by President Fernandez to head the committee in charge of monitoring, adapting and guiding the public about the SFS. The plan will provide health care for more than three million Dominicans, according to Hoy. The Vice President was upbeat about the SFS, explaining that before the President took control of the talks there were 14 points that needed to be discussed and to date there are just four points remaining.
Meanwhile, the treasurer of the Family Health Insurance (SFS), Henry Sadhala, quoted in Listin Diario says that all the money that businesses have already paid towards the SFS will be returned, because the plan has been postponed until September. Sadhala says that invoicing for the SFS will begin on 15 August. Sadhala added that about 1,100 companies paid the SFS for May and that an advertisement would be published in tomorrow's press to explain the procedure for the return of the monies to companies and that these need to reimburse their employees for the deductions.

Government tourism initiatives
At a ceremony attended by President Leonel Fernandez, Tourism Minister Felix Jimenez unveiled the government's new tourism plan, which he says aims to increase the sector's competitiveness and diversify the country's tourism offer. Jimenez says that the plan is about more than just the construction, restoration and remodeling or ports, airports and roads. He said that it is about creating initiatives aimed at attracting investment to the sector and about the exploration of new tourist locations and new offers. Jimenez also announced that the President would be submitting to a bill to Congress in the next few days, proposing the creation of the National Tourism Development Institute, under the guidance of the Tourism Ministry. The Ministry, along with the National Restaurant and Hotel Association (Asonahores) is also working on drafting a bill aimed at setting up the National Institute for Promotion and Tourism Image.

JCE pauses process
The Central Electoral Board (JCE) has announced that it has paused the control and modernization process of its civil registries because a reported RD$20 million monthly deficit has caused a financial crisis at the JCE. The process, which began this past March, will affect 104 civil registries in Santo Domingo and throughout the Dominican Republic. Diario Libre writes that to date 51 registries had received some of the new equipment that was promised. Roberto Rosario, president of the JCE Administrative Chamber says that the deficit that the JCE is facing is only affecting the modernization of the civil registries. Rosario also said that the RD$25 million per month in revenues that the JCE receives through cedula processing and other civil registry process does not cover the registries' monthly costs.

Edes making progress
EdeEste, EdeNorte and EdeSur have signed an agreement with the Superintendence of Energy aimed at strengthening projects that provide 24 hours of power to neighborhoods where residents promise to pay their energy bills. Energy Superintendent Francisco Mendez says that of the 500 energy circuits in the DR, 215 are supplied with electricity 24 hours a day, some 45% of the total circuits. At a ceremony at the Hotel Santo Domingo representatives from the three Edes explained that the agreements sought to give continuity to the 24-hour power plan and that more circuits will be added to the program within the next few months.

Questioning hotels in Park of the East
Environment Minister Max Puig says that he will name the legislators who he is accusing of trying to appropriate protected lands for personal gain. Puig also said that he would accept the invitations made by the heads of the Chamber of Deputies and the Senate to discuss details of the recent firestorm he caused. The controversy began when Puig claimed that legislators were fronting for special interest groups interested in obtaining over 35 square kilometers of beachfront property in La Altagracia province. The accusations hit the Chamber of Deputies like a "bombshell" and legislators are now asking for Puig to name names, although he has not yet done so. Legislator Minou Tavarez Mirabal put the ball in Puig's court and said that Puig could not continue to evade the issue after making such comments and called on him to reveal the names.
The Coalition for the Defense of Protected Areas has voiced its opposition to Tourism Minister Felix Jimenez's issue of Resolution 6-04-10866 that grants permission to Pablo Pineiro of the Bahia Principe hotel chain to develop beachfront property included under the protected area of the National Park of the East in La Altagracia Province. The permit authorizes the construction of a high-density resort, as reported in Diario Libre.
Diario Libre also reports that the Chamber of Deputies is asking the Ministry of Environment to assume its responsibility and prepare the rules for the application of the law on protected areas without any further delay. Deputy Minou Tavarez Mirabal says that four years have gone by since the law was approved, but the rulings for its implementation have not been issued, despite the fact that the law establishes a six-month period for their submission to Congress.

Ethanol agreement with Brazil passed
The Chamber of Deputies ratified a protocol of intent between the DR and Brazil yesterday for the production and use of ethanol as a fuel in the DR. The Senate also ratified the agreement, according to Hoy. The agreement will allow the DR to begin using ethanol as a fuel instead of fossil fuels, while at the same time reactivating the agro industry, which produces the raw materials for ethanol processing. Hoy writes that ethanol will replace 25% of the current fuel being used and will save the country US$130.7 million per year, or 2.1 million gallons of fuel per year.

DR and Haiti sign agreement
The Dominican Republic and Haiti have signed a cross-border environmental project with the aim of protecting, valuing and making use of the biodiversity of the areas surrounding the Enriquillo and Azuei lakes in the south west of the DR, on the border with Haiti. The three-year project involves a total investment of EUR2.5million. The European Union is providing the funds and of the total amount, EUR1,362,400 will go to the Haitian side and EUR1,137,600 will be for the Dominican side. The project also seeks to educate people living in the surrounding areas, provide better training for the authorities and develop a wind power system, among other things. The agreement was signed by Dominican Environment Minister Max Puig and his Haitian counterpart Jean Marie Claude Germaine in the southwestern border town of Jimani.

Three of a kind
Bernardo Vega, historical researcher, former governor of the Central Bank and ambassador to the US, writes in today's Clave Digital about the way the three leading political parties have become "three of a kind". He says Dominican parties fit in with Gabriel Garcia Marquez's statement in "One Hundred Years of Solitude" that "the only difference between liberals and conservatives is that some go to mass at 5 and others go at 8pm."
Vega comments that when studying the government plan proposed by former President Hipolito Mejia in his 2000 electoral campaign there is no reference to the massive indebtedness that would mark his government, with loans taken for the purchase of overvalued and non-priority goods, from commercial banks, primarily Spanish lenders. There was no mention either of issuing sovereign bonds in the electoral proposals. His party, the PRD was always a strong supporter of a ban on presidential re-election, but it went on to modify the Constitution to permit this. Ironically, this has been to President Leonel Fernandez's benefit.
Vega then comments on President Leonel Fernandez who in his electoral campaign in 2004 never mentioned that the government's largest expenditure would be the metro, or that his government would undertake borrowing from a handful of Brazilian companies without transparency [the Senate has passed a first reading on US$91 million in Brazilian loans for the Samana aqueduct and Pinalito dam] , or the tax reforms that affected the middle class instead of the wealthy.
He also mentions that the issues that divide voters in other countries are absent from Dominican political debates. These include the legalization of abortion and migration. He then comments that controversial priest Pierre Ruquoy, prior to leaving the country, dared to publish a list of middlemen who help Haitians to make illegal border crossings, with their full names and locations. This touched upon important military and business interests. But, he observes, the issue of migration is not dealt with any of the three leading political parties, none of which refuse to take a position. In our country the politicians have not made their positions on abortion and migration known and instead we only hear their slogans without promises, positions or any substance. He concludes, as Garcia Marquez would have said: "We are a race condemned to 100 years of political solitude. Will we have a second chance on Earth?"

Justifying the many NY consuls
Recently appointed Dominican consul in New York City, Eduardo Selman called the Huchi & Nuria radio talk show on CDN yesterday to explain that the 26 vice consuls employed at the NYC consulate are necessary and carry out multiple roles to serve the Dominican community in New York, estimated at nearly 650,000. The investigative reporters had revealed that the Dominican consulate employs more consuls than the Mexican or Indian consulates. Selman denied that the vice consuls who are not accredited by the US government, primarily because they are US residents or citizens, sign documentation. The journalists had reported that any official documentation signed by the non-accredited staff could be invalid. The journalists highlighted the high cost of consular staff in the US, most of whom are considered political appointees.

Provinces on high alert
Four provinces in the country's Cibao region have been put on high alert due to the continuous rains over the last few days. Flooding is already affecting several areas and mudslides have become a serious threat. Diario Libre reports another person has been killed as a result of the heavy rains. A man lost his life trying to cross the Moca River. There have been a total of five deaths since the rains began last week. Diario Libre writes that 5,264 people have been evacuated from their homes while 1,316 houses have been affected by the rains. La Vega, Espaillat, Sanchez Ramirez and Duarte have all been put on high alert while Maria Trinidad Sanchez, Puerto Plata, Santiago, Salcedo, Monte Cristi and Santo Domingo continue with yellow alerts. Green warnings have been given to Monte Plata, Hato Mayor, Monsenor Nouel, Dajabon, Independencia, Samana, San Cristobal, Ocoa and Elias Pina.

Five Dominicans lead All-Star game voting
Alex Rodriguez, the much talked about New York Yankees third baseman, leads all vote getters in the AL East for this year's all-star game. So far Rodriguez has tallied up 843,550 votes for the mid-season classic. David Ortiz (601,770 votes), Robinson Cano (282,251), Vladimir Guerrero (578,430) and Manny Ramirez (449,372) have also received votes for the 78th presentation of MLB's All- Star game. The event will be held on 10 July in San Francisco.

Super Felix in NY
Felix Sanchez, the DR's only ever Olympic gold medalist, will be in New York this Saturday to compete in the Reebok Grand Prix. The event will take place at 5:30pm at the Icahn Stadium under the Triboro Bridge. Several other Olympic medalists will also be taking part in then event along with Sanchez.
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