The Customs Tariff (Law 146-00 on Imports and Exports) is used to regulate international trade in the Dominican Republic.
The primary function of tariffs is to protect the national economy, the domestic industry, and small businesses.
In this article, we will explain what the customs tariff is, its purpose, and its types.
What Are Tariffs?
Customs tariffs are taxes applied to imports and exports, with most tariffs applying to imports. This means that all goods entering the country must pay a tariff.
When a tariff is imposed on a product, it will have a higher selling price than in its country of origin.
In the case of export tariffs, these are imposed on a national product or good sold abroad. They are levied by importing countries of primary products and are applied to increase the country’s revenue or to create scarcity in global markets.
The imposition of tariffs is known as tariff barriers. There are also non-tariff barriers, which involve technical or legal obstacles to discourage imports.
If you need advice on tariff payments in the Dominican Republic, at Contadores Dominicanos we have highly qualified professionals ready to assist you.
What Are Customs Tariffs?
In the Dominican Republic, there are three types of import tariffs:
- Ad Valorem Tariff: A determined percentage (taxable base) on the CIF value (cost, insurance, and freight).
- Specific Tariff: Tariffs with a specific quota or number.
- Mixed Tariff: A combination of the other two tariffs, where a percentage and a quota are applied to a product.
Why Do Governments Impose Import Tariffs?
- To protect domestic industry from foreign competition.
- To generate revenue.
What Is the Importance of Tariffs?
When importing a product or goods, it is important to know the tariffs that will be applied, as these taxes will increase the cost of the goods.
If you want to import products to another country, you need to be aware of the types of tariffs and tariff rates that apply to the type of product or goods you want to import.
Consequences of Establishing Tariffs:
- The domestic industry may become less efficient because, by reducing competition, the quality of products or services may decline.
- By imposing a specific tariff on a service or product from a particular country, that country may impose a similar tariff on products or services in return.
Tariff Reductions in the Dominican Republic
The following free trade agreements lead to the total or partial reduction of tariffs paid on goods imported from contracting countries:
- Free Trade Agreement between the Dominican Republic and Central America.
- Free Trade Agreement between the Dominican Republic and the Caribbean (CARICOM).
- Free Trade Agreement between the Dominican Republic and Panama (partial scope).
- Free Trade Agreement between the Dominican Republic and the United States (DR-CAFTA).
- Free Trade Agreement with the European Union (EPA’s).
Learn more about tariffs in the Dominican Republic in the following article: Import Taxes in the Dominican Republic.
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