The new Fiscal Amnesty Law 2023 is a bill that could bring benefits and facilities for taxpayers in the Dominican Republic. It includes a special transitional treatment for tax debts prior to 2015, as well as an abbreviated audit procedure.
It also aims to offer payment facilities for tax debts after 2016. Additionally, an amnesty is proposed for the public sector, forgiving 80% of debts for unreported withholdings.
It’s important to note that currently, the bill is under analysis and discussion in the Finance Committee.
What is a Fiscal Amnesty Law?
A fiscal amnesty law is a measure adopted by a government to allow taxpayers to regularize their tax situation by declaring and paying overdue taxes, thereby avoiding penalties, surcharges, or additional fines.
Essentially, it aims to encourage the repatriation of undeclared economic resources and tax compliance by offering incentives and favorable conditions for taxpayers to settle their outstanding fiscal obligations.
Key Aspects of the Bill – Special Transitional Treatment in Tax Matters 2023
- Massive tax prescription for tax debts before the year 2015.
- Abbreviated audit procedure for cases of tax inconsistencies notified by DGII (open at the time of the law’s promulgation).
- 30% discount on the tax (principal) of tax debts until December 31, 2021 determined by DGII, including 100% elimination of late fees and compensatory interest.
- 100% waiver of late fees and 6 months of compensatory interest for tax debts until December 31, 2021.
- Fiscal amnesty and debt discounts for income tax and ITBIS withholdings for Dominican State institutions, except public enterprises.
Analysis and Discussion of the Bill in the Finance Committee
The fiscal amnesty bill proposed by the Executive Branch has been submitted to the Finance Committee of the Chamber of Deputies for analysis and discussion. This step is crucial for the approval and subsequent implementation of the law.
The Finance Committee, composed of experts in fiscal and economic matters, will thoroughly review the content of the bill. Both the proposed benefits for taxpayers and the implications and potential impacts on public finances will be evaluated.
- The benefits of fiscal amnesty for taxpayers will be analyzed. The tax facilities to alleviate the burden of debts and promote tax compliance will be studied. Additionally, the conditions and requirements to access these benefits will be evaluated.
- Special transitional treatment of tax debts before 2015 will be discussed. The appropriateness of automatically declaring these debts as prescribed and the potential effects on tax revenue will be analyzed.
- The abbreviated audit procedure for taxpayers subjected to desk audits in the years 2019, 2021, and 2022 will be addressed. The effectiveness of this simplified process and its impact on streamlining administrative procedures will be evaluated.
- Space will be dedicated to analyzing the proposed payment facilities for tax debts from 2016 to 2021. The established conditions, terms for payment, and their effect on tax revenue will be studied.
- Discussion will also cover payment agreements with owners of lottery banks. The relevance of establishing these agreements and the benefits they would provide to those involved will be analyzed.
- Furthermore, the amnesty for the public sector will be evaluated, which would forgive 80% of debts for unreported ISR and ITBIS withholdings until August 1, 2020. The feasibility and effectiveness of this measure in the context of economic recovery and strengthening the tax system will be discussed.
The Finance Committee will meticulously analyze each of these aspects, considering the opinions and perspectives of various stakeholders, including fiscal experts, representatives from the business sector, and civil society.
The goal is to make informed and consensus-based decisions that promote the country’s economic well-being. Once the discussion is complete, a decision will be made on the approval of the bill.
If approved, implementation will proceed, involving the enactment of established measures and monitoring their impact on tax revenues.
Estimated Revenue Generation with Bill Approval
The approval of the new Fiscal Amnesty Law 2023 in the Dominican Republic aims primarily to boost tax revenues and alleviate taxpayers’ debt burden. Estimates suggest that this measure could generate a substantial sum for the state.
It is estimated that, if the bill is approved, between 6,000 and 10,000 million pesos could be collected. This figure is significant and represents an opportunity to strengthen the country’s public finances.
The fiscal amnesty seeks to incentivize taxpayers to regularize their tax status by offering payment facilities and forgiving certain percentages of debt. By providing this special treatment, it is expected to increase taxpayers’ compliance with fiscal obligations.
It is important to note that these estimates are based on previous experiences with fiscal amnesties implemented in the country. Previous fiscal amnesties, carried out in 2001, 2007, 2012, and 2020, generated a total of 46,099.2 million pesos.
However, it is necessary to consider that estimated figures may vary depending on various factors, such as taxpayers’ adherence to the amnesty and the effectiveness of post-implementation auditing.
Nevertheless, it is expected that this new law will significantly contribute to revenue generation, strengthening various sectors and programs in the country.
At Contadores Dominicanos, we are ready to assist you with all matters related to tax payment and declaration filing, so you can focus on your business without worrying about paperwork.
