SANTO DOMINGO.- Dominican Republic has lost from the Dr-Cafta trade pact, which took effect one year ago on Saturday, RD$2.54 billion from lost tax revenues, the Customs Agency (DGA) said in a statement.
It said that’s the reason prices of products imported within this Free Trade Agreement must fall, even with external factors which impact the economy, such as rise in oil prices. So far the price of products has only climbed.
The DGA said of 6,758 products with tariff fees or lines, 3,679 aren’t taxed, product.
It said since March 2007 to 28 February this year, revenue losses of RD$2.2 billion are expected on imports from the United States which entered tax-free via the Dr-Cafta.
On taxed imports from Guatemala, El Salvador, Honduras and Nicaragua in the Dr-Cafta’s first year reached US$301 million, for a loss from lowered duties of RD$2.2 billion, with a fiscal impact totaling RD$2.6 billion.
The DGA adds that projected to February 28 this year, total revenue losses from the agreement’s application is RD$2.5 billion, of which the U.S., Virgin Islands and Puerto Rico represented a total fiscal impact of RD$2.5 billion, whereas from the Central America countries it was RD$2.6 billion.
Written by: Belial, 25 Feb 2008 2:10 PM
From: United States, Texas
"The DGA adds that projected to February 28 this year, total revenue losses from the agreement’s application is RD$2.5 billion, of which the U.S., Virgin Islands and Puerto Rico represented a total fiscal impact of RD$2.5 billion, whereas from the Central America countries it was RD$2.6 billion," the DT reports today.
0000
If so, how can the lost be only RD 2.54B?
For doesn't the quote say:
US, Virgin Islands, Puerto Rico loss .... RD$2.5 B
Central America countries loss.............. RD$2.6 B
For a total loss of RD 5.1B?
The headline seems to focus only on the US-DR trade under the pact.
Apart from the revenue losses, why do prices of many US exports to the DR rise after the DR removes taxes on these exports?
[The CBI deal removed, during the Reagan regime, US taxes on many DR exports to the US.]
So, CAFTA, so far, isn't earning government revenue or fighting inflation.
Will "cheaper" or "higher" US exports displace DR products in the DR market?
From: Dominican Republic
One of the reasons that the PRICES of imported items haven't lowered is because the recipients of these items are reluctant to lower theprices. To do such would reduce their profits by at least 10%-30% and no businessman wants to do that even though the profits are of an "opportunistic" nature and have no bearing on the "cost of goods sold".
In other words therecipients haven't lowered the prices of the imported goods by the amount of the "tax removal" figure.
The same applies to taxes removed on locally produced products. An example is thetax on beer and tobacco products. The prices haven't been lowered by the amount of the original tax imposed.
Just the way Dominican businesses operate. Once the price goes up, it stays up.
And these businesses are always talking about "competativeness" in the market place.
That Dominican pschye at work again andstill. it never changes.
TB
Written by: Belial, 25 Feb 2008 7:35 PM
From: United States, Texas
Your guess sounds plausible to me.
I reject like you ... apparently ... the explanation, in the article, about rising oil prices because everybody in the world knew that oil prices were rising last year when CAFTA took effect and CAFTA's proponents were insisting that prices of DR's imports would drop ... significantly.
From: United States
The more I advance into completing my permanent move to Dominican Republic, the more I see how caos dominates the country...
The DGA talk about what they lost, but they do not mention all the concessions they give DR around the world so their exports are able to enter with less tariffs... Anyways, the CAFTA is truly hypothetical as in all truth they may have reached this agreement but in 3 years I have seen taxes shoot thorough the roof! Sometimes is more expensive to pay the taxes of a hotel than the actual hotel!
I work for a company that has for many decades sold products to th DR market, they have many products that are US made, in one year we are still trying to figure out what exactly has CAFTA done as the customs process in DR will look for any excuse to impose some tariffs so they the CAFTA does not limit their stash!
I think the CAFTA is in fact a treaty that no one is monitoring closely enough to help the CAFTA advantage. Ans if there is such identity they keep the
From: United States
Hidden!
Written by: Belial, 26 Feb 2008 2:06 PM
From: United States, Texas
"The DGA talk about what they lost, but they do not mention all the concessions they give DR around the world so their exports are able to enter with less tariffs"
0000
The removal of foreign taxes on DR exports could be seen as compensating benefit for the loss of DR government revenue, resulting from the removal of taxes on foreign exports to the DR.
But this alleged or perceived or imagined compensating benefit is significant only as long as the DR's exports don't drop as a result of CAFTA or anything thing else.
Many predict CAFTA will aid US exporters in methodically knocking out competing Dominican bourgeoisie in the US and DR markets that includes trade of over 7000 different goods and services.
Above all else ... including inflation, a country should judge CAFTA from the point of view of the agreement's effect on the country's exports.
If your exports plunge, dump CAFTA. Don't be a sucker of the imperialists.
Written by: Belial, 26 Feb 2008 2:13 PM
From: United States, Texas
So far, this seems to be the case with exports:
0000
"Dominican exports to U.S. decline, Latin Business Chronicle says," the DT headline of Feb. 20, 2008, screamed.
http://www.dominicantoday.com/dr/....ine-Latin-Business-Chronicle-saysThe removal of foreign taxes on DR's exports which are falling is not a compensating benefit.
In the US case, the US taxes on many DR exports were removed in the 1980s, so CAFTA gave DR nothing that DR hadn't had for 20 years. But the US imperialists scored big when DR taxes on US exports were removed ... "to level the playing field" so that the underprivileged US bourgeoisie can compete ... "on a level playing field" ... against the mighty Dominican bourgeoisie
Rather, it looks like the DR is being played for a sucker.
From: Dominican Republic
In essence, what has happened is that with the removal of the "importr taxes" on US goods has created a shortfall in those taxes previously enjoyed. The result has been a severe drop in taxes formerly collected. Hence the "Loss" they speak of.
In actuality, this "Loss" has been more than compensated for by the raising of "Local" taxes on all products (the inclusion of previously exempted products into the "ITBIS", or value added tax.
The gov't hasn't REALLY lost anything, merely had some of it's enormous income transferredto another element of the tax system.
This allusion of "Loss" can be attributed to a possibility of further "Tax Reform" measures yetto be taken by theTax Department to further increase the inflow of Tax Pesos or expansion of the existing taxation bases.
I look for an "Income Tax" expansion very soon, since this appears to be the next step in expanding thetax base for more revenue.
Government can always find ways to increase revenue, albeit un-needed.
TB
Written by: Belial, 26 Feb 2008 6:20 PM
From: United States, Texas
If so, then "free trade" is just the transfer of part of the tax burden from the foreign imperialists to the domestic workers.
From: Dominican Republic
Belial, you didn't read the comment correctly.
The "foreign imperialists", as you call them, don't/didn't ever pay the "import tax burden" at all. The Dominican who imported the item paid the"import tax" at the customs office in addition to any other taxes imposed through the ITBIS system.
The import tax was based on the purchase price (as stipulated by a list maintained a customs and not necessarily the declared purchase price on the invoice) of the item plus all other costs (insurance, transport costs, brokers fees, etc.) in getting it to the DR. When DR-CAFTA went into effect, these import taxes were eliminated. That's what was "lost". However, the previous high price was now much cheaper by the elimination of the previous import tax, but the prices didn't change immediately because of goods in warehouses having paid the import tax. The eventual wash-out of these goods didn't effect a lower price due to the reluctance of the vendor to cut his profit-margin.
TB
Written by: Belial, 27 Feb 2008 6:06 PM
From: United States, Texas
Thanks for the clarification. I mistook your point.
It still appears ... to me ... that the imperialists had to adjust or reduce their purchase price to leave room of their domestic importers in the DR.
If so, it seems that the imperialists assumed the tax in a preemptive manner and therefore the tax can be imputed preemptively as one on the imperialists.
But I understand that the accounting will not express this "preemption" by its numbers. But the underlying reality seems to say it.
Written by: BLANCO, 28 Feb 2008 5:23 PM
From: Dominican Republic
Gentlemen all of your comments are academic. the truth is if you take the time to read the english version (official)of CAFTA-DR agreement...., use your highlighter. you will find nothing in there of any benefit to the Dominican country or its people This agreemnent was signed with money spread around by mr HERTELL AND passed by only 2 votes in the usa congress
start hoarding rice.......because soon the dr will not be able to produce it
From: Dominican Republic
It is amazing to me that after centuries as stooges for imperialist countries (Spain,U.S.A.) that there still could be politicians so naive as to think that any accord with the "motherland" could bring any benefit to the colonial people. They just take whatever crumbs of the pie are offered at the time and BS the public, by making believe that what the outsiders say will happen. As someone said to me "dream on!". CAFTA-DR was and is for the benefit of the outsiders.
From: Dominican Republic
I just remembered, look at Mexico, their corn farmers just vanished. Now their corn is made in America. Furthermore, they are being invaded with genetically modified corn. They have to pay U.S. companies like Monsanto for the "privilege" of using "their" seeds every year. Now the Mexican government has to subsidize the corn that is bought by the people b/c it comes from the U.S. Expect all local produce to go the same way in DR in the near future.
Written by: Belial, 2 Mar 2008 1:34 PM
From: United States, Texas
"I just remembered, look at Mexico, their corn farmers just vanished. Now their corn is made in America. Furthermore, they are being invaded with genetically modified corn. They have to pay U.S. companies like Monsanto for the "privilege" of using "their" seeds every year. Now the Mexican government has to subsidize the corn that is bought by the people b/c it comes from the U.S. Expect all local produce to go the same way in DR in the near future."
0000
This and worse is the future that the US imperialists plan for the Dominicans. After all, it worked in Mexico.
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0000
If so, how can the lost be only RD 2.54B?
For doesn't the quote say:
US, Virgin Islands, Puerto Rico loss .... RD$2.5 B
Central America countries loss.............. RD$2.6 B
For a total loss of RD 5.1B?
The headline seems to focus only on the US-DR trade under the pact.
Apart from the revenue losses, why do prices of many US exports to the DR rise after the DR removes taxes on these exports?
[The CBI deal removed, during the Reagan regime, US taxes on many DR exports to the US.]
So, CAFTA, so far, isn't earning government revenue or fighting inflation.
Will "cheaper" or "higher" US exports displace DR products in the DR market?
In other words therecipients haven't lowered the prices of the imported goods by the amount of the "tax removal" figure.
The same applies to taxes removed on locally produced products. An example is thetax on beer and tobacco products. The prices haven't been lowered by the amount of the original tax imposed.
Just the way Dominican businesses operate. Once the price goes up, it stays up.
And these businesses are always talking about "competativeness" in the market place.
That Dominican pschye at work again andstill. it never changes.
TB
I reject like you ... apparently ... the explanation, in the article, about rising oil prices because everybody in the world knew that oil prices were rising last year when CAFTA took effect and CAFTA's proponents were insisting that prices of DR's imports would drop ... significantly.
The DGA talk about what they lost, but they do not mention all the concessions they give DR around the world so their exports are able to enter with less tariffs... Anyways, the CAFTA is truly hypothetical as in all truth they may have reached this agreement but in 3 years I have seen taxes shoot thorough the roof! Sometimes is more expensive to pay the taxes of a hotel than the actual hotel!
I work for a company that has for many decades sold products to th DR market, they have many products that are US made, in one year we are still trying to figure out what exactly has CAFTA done as the customs process in DR will look for any excuse to impose some tariffs so they the CAFTA does not limit their stash!
I think the CAFTA is in fact a treaty that no one is monitoring closely enough to help the CAFTA advantage. Ans if there is such identity they keep the
0000
The removal of foreign taxes on DR exports could be seen as compensating benefit for the loss of DR government revenue, resulting from the removal of taxes on foreign exports to the DR.
But this alleged or perceived or imagined compensating benefit is significant only as long as the DR's exports don't drop as a result of CAFTA or anything thing else.
Many predict CAFTA will aid US exporters in methodically knocking out competing Dominican bourgeoisie in the US and DR markets that includes trade of over 7000 different goods and services.
Above all else ... including inflation, a country should judge CAFTA from the point of view of the agreement's effect on the country's exports.
If your exports plunge, dump CAFTA. Don't be a sucker of the imperialists.
0000
"Dominican exports to U.S. decline, Latin Business Chronicle says," the DT headline of Feb. 20, 2008, screamed.
http://www.dominicantoday.com/dr/....ine-Latin-Business-Chronicle-says
The removal of foreign taxes on DR's exports which are falling is not a compensating benefit.
In the US case, the US taxes on many DR exports were removed in the 1980s, so CAFTA gave DR nothing that DR hadn't had for 20 years. But the US imperialists scored big when DR taxes on US exports were removed ... "to level the playing field" so that the underprivileged US bourgeoisie can compete ... "on a level playing field" ... against the mighty Dominican bourgeoisie
Rather, it looks like the DR is being played for a sucker.
In actuality, this "Loss" has been more than compensated for by the raising of "Local" taxes on all products (the inclusion of previously exempted products into the "ITBIS", or value added tax.
The gov't hasn't REALLY lost anything, merely had some of it's enormous income transferredto another element of the tax system.
This allusion of "Loss" can be attributed to a possibility of further "Tax Reform" measures yetto be taken by theTax Department to further increase the inflow of Tax Pesos or expansion of the existing taxation bases.
I look for an "Income Tax" expansion very soon, since this appears to be the next step in expanding thetax base for more revenue.
Government can always find ways to increase revenue, albeit un-needed.
TB
The "foreign imperialists", as you call them, don't/didn't ever pay the "import tax burden" at all. The Dominican who imported the item paid the"import tax" at the customs office in addition to any other taxes imposed through the ITBIS system.
The import tax was based on the purchase price (as stipulated by a list maintained a customs and not necessarily the declared purchase price on the invoice) of the item plus all other costs (insurance, transport costs, brokers fees, etc.) in getting it to the DR. When DR-CAFTA went into effect, these import taxes were eliminated. That's what was "lost". However, the previous high price was now much cheaper by the elimination of the previous import tax, but the prices didn't change immediately because of goods in warehouses having paid the import tax. The eventual wash-out of these goods didn't effect a lower price due to the reluctance of the vendor to cut his profit-margin.
TB
It still appears ... to me ... that the imperialists had to adjust or reduce their purchase price to leave room of their domestic importers in the DR.
If so, it seems that the imperialists assumed the tax in a preemptive manner and therefore the tax can be imputed preemptively as one on the imperialists.
But I understand that the accounting will not express this "preemption" by its numbers. But the underlying reality seems to say it.
start hoarding rice.......because soon the dr will not be able to produce it
0000
This and worse is the future that the US imperialists plan for the Dominicans. After all, it worked in Mexico.