Former President Leonel Fernández has proposed the elimination of tax advance payments for micro, small, and medium-sized enterprises (MSMEs) in a bid to alleviate financial burdens. In a press release, Fernández acknowledged that in the past, the government faced cash flow issues, leading to advance tax payments. However, he argued that the current budget for 2024 in the Dominican Republic exceeds one trillion pesos, providing sufficient resources for the state to refrain from bothering MSMEs.
Fernández, who is also the president of the Fuerza del Pueblo party, emphasized how advance tax payments have hindered businesses and caused some to shut down prematurely. He believes that demanding payments from companies that have yet to achieve profitability inhibits their dynamism. This has prompted him to seek alternatives, proposing that funds for advance tax payments be sourced from the Reserve Bank throughout the year, instead of paying in advance.
Highlighting that the Reserve Bank is a state bank that yields profits, Fernández suggested that the government use these dividends to cover tax payments within the January to December timeline. His proposal aims to abolish advance payments, allowing taxes to be paid gradually throughout the year, providing relief to businesses. This move would hopefully alleviate the financial strain on MSMEs and prevent premature closures.
Fernández’s proposal has garnered attention as it offers a potential solution to the longstanding issue of tax advance payments for businesses. It remains to be seen how this proposition will be received by the government and whether it will be implemented to benefit the local economic landscape.