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Daily News - Monday, 25 June 2007

Customs double dipping?
The VAT (ITBIS) tax that the Customs Department (DGA) levies on imports is not just applied to the product value but is also levied on the duty. In essence, this is a double taxation. Even though VAT (ITBIS) is a tax collected by the Department of Taxes (DGII), it is up to Customs to collect it when the imports are subject to duty. The problem arises when Customs applies the 16% tax to the duty as well as the value of the item itself, a clear case of a tax on a tax. For example, according to Diario Libre, if the cost of your product, including insurance and freight was RD$500,000, you would supposedly pay a VAT of 16% or RD$80.000. However, if the same product was subject to, say, 20% duties, you would pay the 16% VAT on the product, plus the duties. (RD$500,000 + RD$100,000 = RD$600,000 X 16% = RD$96,000). Importers say that the government should collect the VAT on the price FOB, since both the insurance and freight charges are already taxed, and that there should certainly not be any VAT on the duties levied. Diario Libre asked the DGA to respond and their only comment was that the DGA levies the 16% VAT on the total bill.

IMF warning on ethanol
The International Monetary Fund is saying that the increased demand for bio-fuels processed from cereals and sugars threatens to cause an increase in the cost of food, beginning with corn, wheat and soybeans. The IMF's sub-director of Analysis Charles Collyns warns that the industrialized nations see bio-fuels as a quick solution to the problem of oil dependency. Therefore, edible oils will see an increase in price. Also, the price of meat will increase as the price of grains increases. On the international level, the last year has seen a general, overall increase of 10% in food prices, according to El Caribe. Cuban leader Fidel Castro and Lester Brown of the Earth Policy Institute have warned of the pending battle between fuel and food.

DR-CAFTA has safeguards
The DR-CAFTA agreement includes the possibility that when a Dominican business or industry feels threatened by a massive import of a product, they can call for an investigation to protect their interests. According to El Caribe, the safeguard measures include a temporary halt to imports of any product that is considered a threat or if it damages a local sector. Such emergency measures are contained in Chapter 8 of the agreement. This chapter deals with an adjustable mechanism that permits a respite period for local producers who have to work with new international trade conditions or very aggressive commercial operations. Unfair trade practices are also taken into consideration, and offenses such as dumping are not to be permitted. International trade conflict specialist Velia Govaere said that while the Dominican Republic has not yet had these experiences, it would certainly face them as DR-CAFTA progresses. She pointed out that Costa Rica has already sought protection under the statute with regard to the importation of used clothes.

Powdered milk could double in price
There are about 2,200 small cheese factories in the Dominican Republic, providing employment for 10,000 people and using 297 million liters of milk each year. The president of the Milk Importers' Association (AIL), Bayardo Mejia Alcala, told reporters that if the government does not reduce the current 20% tariff on powdered milk, a large can of this product could end up costing RD$900, nearly double the current price. Mejia said that milk was subject to the same tariff rate as a Toyota Land Cruiser. According to the importer, milk prices have gone up steeply over recent months and are now above US$5,000 per metric ton, and this price is enough to guarantee that local milk producers will not be driven from the market by imports. The head of the national milk producers' organization, Conaleche, Juan Recio, confirmed that the price increase on the international markets would benefit local producers and cheese manufacturers. Mejia's recently announced a major investment in local dairy products, with the buyout of Michel brand in the East.

Dengue offensive considered a success
Minister for Public Health Bautista Rojas Gomez has told reporters that the two-day nationwide campaign to fight dengue fever had been a success. According to Hoy, the minister said that the number of homes visited by the volunteers and workers was beyond the first estimates, but he said that exact numbers would not be available until Tuesday. The campaign emphasized the need to wash water tanks with chlorine and to keep the tanks covered to avoid infestation and breeding of mosquitoes. In Santiago, reporters were told that 123,860 homes had been visited during the first day of the campaign and that 44,058 mosquito-breeding sites were eliminated. According to the newspaper, the campaign will continue for the next 60 days.

Plan Renove II
It's official. Plan Renove II is a fact. El Dia reported that presidential Decree 250-07 has created the Land Transport Development Fund (Fondo del Desarrollo del Transporte Terrestre) to finance transport vehicles. The fund will source collections from previous vehicle financing under Plan Renove I, contributions by the government, and loans borrowed from local and international banks, with government authorization. The fund's board of directors, which was appointed by the Executive Branch, includes officials from the Metro "ministry" (OPRET), the Metropolitan Transport Authority (AMET), the Technical Land Transport Office (OTTT) and the Controller of the Republic. Representatives from public transport unions Fenatrano, Fenatrado and Conatra have also been included on the board. The presidents of Fenatrado and Conatra have a court case pending for corruption in Plan Renove I. As reported in El Dia, the plan is to purchase hundreds of vehicles with taxpayer money for distribution to the board member associates.

Senate strips LMD of funds
The Dominican Senate has approved a bill that will create the Participative Municipal Budget (PPM) and the Code that relieves the Dominican Municipal League (LMD) of its role in administering the funding of all the country's municipalities. The first bill now goes to the executive for signing or further amendments. The bill that removes the funds from LMD control will return to the Chamber of Deputies. The idea of the PPM is to increase citizen participation in the process of creating local city budgets. The Municipal Code that was approved by the Senate allows for the municipalities to receive their budget money directly from the National Treasury and not through the LMD. As a result, the LMD would function as an advisory group for the city councils. If the bill becomes law, an assembly of mayors will decide how much money the LMD should get for its consulting activities. The chief officer of the LMD is the PRSC party's presidential candidate.

Senate likes money
In eight months, the Dominican Senate has approved loans for US$581 million (RD$18.7 billion). The funds will pay for a range of public works projects and the omnipresent Metro. Another eight financing projects are awaiting approval, for a total of US$171 million. Also pending approval and not included in the eight is the EUR238 million (US$309.9 million) needed to provide the electricity network and the rails for the Metro in Santo Domingo.

"This country is screwed!"
The A.M. column on page two of today's Diario Libre has a dramatic title. Editorialist Adriano Miguel Tejada says that this is the phrase that is most often heard in the streets every time a government official or politician makes an announcement. Tejada says that if it ever existed at all, the concept of priorities has been lost, and this is the main criticism that intelligent people make about politicians and their activities. The editor says that this country has undeniable needs that require solutions, but that money appears for everything except these needs. Take the case of the hospitals. He asks whether there is any excuse in the world that justifies the state they are in. The latest excuse is the social security issue, while previous excuses were the lack of a budget for repairs that cost pennies compared to the amount of money that is spent on any political absurdity here. Or, he asks, can one justify the stoppage of a hospital remodeling job for RD$50 or RD$60 million when the political parties spent three or four times this amount on their primaries? Tejada continues by saying that the deputies are swimming in money for what he calls "electoral philanthropy" that does no resolve even one of our problems, but instead only increases people's dependence on government assistance and the paternalism of our political system. Finally, the editor, who is a lawyer by profession, says that politicians have it made, since they can legislate in their own favor, with no law to stop them, while the citizen finds it harder and harder to hang on. "The primacy of public spending will take this country towards a revolution, and the ostentation of wealth by politicians will lead to a social upheaval of huge proportions". He ends by saying that he hopes it is not too late.

Over 150 illegal flights
The Dominican Air Force has reported 155 illegal flights over Dominican territory since June 2006. Major General Pena Antonio told Diario Libre reporters that in nearly all of the reported incidents, the planes' flight paths originated in South America. Light planes from South America have dropped tons of drugs along the south coast of the Dominican Republic. The General said that drug traffickers preferred the country because of its geographical location. As a result he praised the purchase of aircraft from Brazil for the use in anti-drug trafficking operations, announced by President Fernandez last week.

Swift boats for DR
The United States Navy has visited Santo Domingo and brought two gifts. The HSV-2 SWIFT dropped anchor in Sans Souci as part of the program to strengthen the Dominican Navy's capacity to intercept drug traffickers and illegal immigrants. The SWIFT is a high-speed catamaran, designed to provide support for smaller fast boats as well as carry out missions in its own right. The crew of the SWIFT will assist in the continued training of the new fast boat crews, who had previously received training in the United States. The fast boats are capable of speeds in excess of 70 miles per hour (60 knots), and require a highly trained crew for optimum service. The assistance program is part of Operation Lasting Friendship.

Three drown in scavenger attempt
Three fishermen have drowned while trying to sack a ship that ran aground just off the Dominican coast near Cabo San Luis, Pedernales. Two other men were rescued and one other evaded capture. High waves were blamed for the capsizing of the Keicheir, CC-k 37-2498, which left the port of Juancho without permission. According to Navy sources, the six men were trying to board a Haitian vessel loaded with appliances and vehicles bound for Port-au-Prince, and that went aground between Juancho and Oviedo off Cabo San Luis. The Navy has already arrested several people who were trying to sack the vessel, and according to Hoy newspaper's reporter in Barahona, the survivors admitted that the vessel was their objective.

Quirino wants a deal
Former Army captain Quirino Paulino Castillo, now on trial for drug trafficking in New York, has offered RD$100 million to have his case files, and those of his family, put aside in the Dominican Republic. In a letter sent to the District Attorney for the National District, Jose Manuel Hernandez Peguero, by his lawyer Felix Olivares, Quirino said that he was willing to rescind all rights to RD$100 million in cash and property if the state would drop its charges against him and his family members. The letter goes on to say that all the other people under indictment in Santo Domingo were merely third parties and ignorant of what was going on. Yet another stipulation of the letter goes on to suggest that in accordance with "preliminary discussions" the National District Prosecutor's Office would hold cash and property worth US$7 million subject to the US court's decisions. Listin Diario said that the District Attorney would study the proposal, and refused to answer any questions from reporters.

CIA announces declassification of documents
The United States Central Intelligence Agency (CIA) has announced the declassification of documents relating to many clandestine, covert and sometimes illegal activities of the 1950s, 60s, and 70s. They were called "the family jewels" by agency spokespersons. According to CIA director Michael Hayden, the documents relate to the Cold War. Historians will have a chance to look at CIA activities connected with Dominican dictator Rafael Trujillo's the assassination in 1961, among other incidents.

Karina sings at the White House
Young Karina Pasian, a US-born daughter of Dominican immigrants, has entertained President George W Bush and First Lady Laura Bush and their guests at the White House. The activity was part of a celebration of Black Music. Karina, who will be 16 on 18 July, sang Erroll Garner's "Misty" and "Can't bring me down", two songs from her upcoming album.
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