"If they tax Internet purchases the Dominican Republic will block international trade"
The exemption of up to US$200 was established in order to favor the logistics of the commercial sect
Diario Libre
SANTO DOMINGO. To tax the Internet purchases of less than US$200, as has been suggested by local commercial groups, would leave the Dominican Republic without the express mail service that is covered in the Free Trade Agreement between the United States and Central America (DR-CAFTA) and would produce a blockage for international commerce and local exports.
The situation was described by representatives of the Dominican Association of Courier Companies (Asodec) who also warned also of the logistical limitations and the high cost implied by the National Directorate of Customs (DGA) trying to collect taxes on each package in general.
Jose Burdie, the Asodec president, Jorge Merette, the executive director and Laura Castellanos, the legal advisor, took part as the guests of Dialogo Libre of the Diario Libre which is broadcast on Mondays over ONTV, Channel 10.
Burdie recalled that the exemption of the payment of taxes on Internet purchases of less than US$200, known as "de minimis", was an initiative of Miguel Cocco when he was the head of the DGA, as a way out of the costs and difficulties that are implied with taxing each small package individually. "He thought about the taxes that Customs would get if instead of charging tariffs on those items they charges a fixed rate. Because as we say, and this is extremely important, that the purchases are tax-exempt, as long as they are less than US$200, we are forgetting that they really do pay taxes," he said.
For each pound that the article weighs, the buyer must pay US$0.10, an amount that provides the treasury with between RD$50 million and RD$75 million a year, according to Burdie.
The exemption of the articles of less than US$200 is contained in Decree 402-05 which was revised and incorporated into the DR-CAFTA agreement signed in 2007 as a mechanism of express mail.
Laura Castellanos explained that, more than benefit the consume, what they intended with the rapid delivery was to eliminate the stumbling blocks and the time (as much as six days) needed for merchandise to clear customs in order for the merchant to carry out urgent orders and receive them the next day.
"The logic of the agreement is not to protect the consumer, but rather these express routes which would become a blockade for international commerce is they do not continue to be express," suggested Castellanos. And she added: "It is not just an issue that we are going to add a tariff or a VAT, it is an issue about the fact that we are taking apart the complete structure of the express mails, with the subsequent violation of the DR-CAFTA."
For his part, Burdie warned that as in any commercial treaty, if the country wants to modify some aspect, it should turn to the consultation mechanisms of the treaty. "What is really feared in this type of a situation is that the countries affected could then put measures into place against Dominican products. We are talking like everything that is bought over the Internet comes from the United States....our principle commercial partner, and there could be certain economic sectors there that feel that these are stumbling blocks for their exports and ask that stumbling blocks be placed on the imports from the Dominican Republic as compensation."
The situation was described by representatives of the Dominican Association of Courier Companies (Asodec) who also warned also of the logistical limitations and the high cost implied by the National Directorate of Customs (DGA) trying to collect taxes on each package in general.
Jose Burdie, the Asodec president, Jorge Merette, the executive director and Laura Castellanos, the legal advisor, took part as the guests of Dialogo Libre of the Diario Libre which is broadcast on Mondays over ONTV, Channel 10.
Burdie recalled that the exemption of the payment of taxes on Internet purchases of less than US$200, known as "de minimis", was an initiative of Miguel Cocco when he was the head of the DGA, as a way out of the costs and difficulties that are implied with taxing each small package individually. "He thought about the taxes that Customs would get if instead of charging tariffs on those items they charges a fixed rate. Because as we say, and this is extremely important, that the purchases are tax-exempt, as long as they are less than US$200, we are forgetting that they really do pay taxes," he said.
For each pound that the article weighs, the buyer must pay US$0.10, an amount that provides the treasury with between RD$50 million and RD$75 million a year, according to Burdie.
The exemption of the articles of less than US$200 is contained in Decree 402-05 which was revised and incorporated into the DR-CAFTA agreement signed in 2007 as a mechanism of express mail.
Laura Castellanos explained that, more than benefit the consume, what they intended with the rapid delivery was to eliminate the stumbling blocks and the time (as much as six days) needed for merchandise to clear customs in order for the merchant to carry out urgent orders and receive them the next day.
"The logic of the agreement is not to protect the consumer, but rather these express routes which would become a blockade for international commerce is they do not continue to be express," suggested Castellanos. And she added: "It is not just an issue that we are going to add a tariff or a VAT, it is an issue about the fact that we are taking apart the complete structure of the express mails, with the subsequent violation of the DR-CAFTA."
For his part, Burdie warned that as in any commercial treaty, if the country wants to modify some aspect, it should turn to the consultation mechanisms of the treaty. "What is really feared in this type of a situation is that the countries affected could then put measures into place against Dominican products. We are talking like everything that is bought over the Internet comes from the United States....our principle commercial partner, and there could be certain economic sectors there that feel that these are stumbling blocks for their exports and ask that stumbling blocks be placed on the imports from the Dominican Republic as compensation."
Diario Libre
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