The Dominican government will submit to the National Congress a bill with a new revenue strategy that seeks to capture between RD$40,000 and RD$50,000 million additional as a response to the pressures that the international crisis imposes on public finances, which also contains measures that will strengthen micro and small businesses.
During a press conference, the Minister of Finance and Economy, Magín Díaz, explained the scope of the initiative, conceived in four dimensions: pro-growth measures, tax simplification, combating evasion, and fiscal consolidation.
The Anti-Crisis Plan for sustainability and the protection of the population against the global crisis seeks to strengthen the sustainability of public finances, preserve macroeconomic stability, and ensure the necessary resources to sustain public investment, essential services, and social protection. The official stated that “The Dominican Republic has shown that it can grow more than the region. The challenge now is to protect what has been built, strengthen our stability, and guarantee opportunities for future generations.”
The project designed its revenue architecture with an explicit premise: not to modify the Tax on the Transfer of Industrialized Goods and Services (ITBIS) – neither its rate nor its base -, not to alter most of the existing selective taxes on fuels, alcohol, cigarettes, and telecommunications, and to exclude micro, small, and medium-sized enterprises from any new tax burden.
The main fiscal consolidation measure is a three-percentage-point surcharge on the Corporate Income Tax (ISR), which would rise to 30% for three years, applicable exclusively to large taxpayers with annual revenues exceeding RD$1 billion. This bracket comprises just over 1,000 companies out of a universe of 140,000 that filed an ISR declaration in 2025, equivalent to less than 0.8% of the total.
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Added to that measure is the marginal increase of the tax on checks and electronic transfers from 0.15% to 0.2%; the creation of a Selective Consumption Tax for electronic cigarettes and vapes; the increase in taxation on casinos and gambling; and a ten US dollar increase in the tax on airline tickets.
On the front of combating evasion, the project enables the collection of ITBIS by the General Directorate of Customs for imports by informal taxpayers, expands ISR withholdings on sectors that are difficult to audit, introduces fiscal traceability mechanisms for alcoholic beverages, cigarettes, and fuels, and grants the Ministry of Finance veto power over decisions regarding incentive laws, to prevent abuses.
Relief for the middle class and SMEs
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The initiative also includes provisions aimed at reducing the tax burden on lower-income segments. For individuals, the bill adjusts the personal income tax (ISR) non-taxable threshold for inflation—which has not been updated for approximately a decade—and raises the exempt minimum from RD$34,685 to RD$39,900, a level sufficient to cover the cost of the family basket for the second income quintile.
Likewise, it increases the deduction for educational expenses from 25% to 30%, and up to 50% when the expenses benefit people with disabilities or neurodevelopmental disorders. These measures would come into effect in January 2027.
For micro-enterprises—which represent 78% of the companies that reported income tax (ISR) in 2025—tax advances are repealed. Small businesses will move to making three payments per year instead of twelve. The agricultural sector will be exempt from advances and asset taxes.
The project also repeals anachronistic tax figures: the law taxing mortgages dates back to 1890; the match tax law, to 1935; and the stamp duty control law, to 1966. Taxes on the incorporation of companies and the Selective Tax on life insurance are also being gradually eliminated, measures that the Government describes as obstacles to competitiveness and formalization.
*The Government is also doing its part *
The guiding criterion, according to the minister’s presentation, is to “compress the non-priority, postpone the non-essential, and preserve the critical functions of the State.” He explained that in 2025, current spending fell by 0.5% of GDP while capital spending increased, and advertising spending is at historic lows, representing 0.099% of GDP and 0.52% of total spending in the 2021–2025 period, below the historical average of the preceding decade (0.109% and 0.62%, respectively).
During that same period, the Fiscal Responsibility Law was comfortably met in its first year of implementation, which allowed the country to place sovereign bonds at rates similar to those of Mexico—a nation with investment grade—and lower than those of Colombia, with the lowest margins in history for comparable securities.
