If Barbados has it bad with a Solid Waste Tax, Dominican Republic is now doing a Catch Up… D.R. Customs reveals 42% surcharge on Internet purchases

The Customs Agency said that starting 15 August 2014,all customers who purchase items over the Internet purchases will be required to pay 18% ITBIS (Value-added tax), plus a luxury tax and the applicable import taxes. In all, it is estimated that an average tax bill for Internet purchases will hover around 42%.

Civil society groups, couriers and even legislators oppose the new tax structure, saying these taxes violate the 2010 Constitution, Decree 402-05, Law 277-12 and the DR-CAFTA trade agreement.

Lawyer Laura Castellanos said that the Customs agency inspectors have visited leading couriers in the country, including UPS, DHL, FedEx and AmeriJet this week. Castellanos called the measure retaliation and intimidation. The couriers have gone public to encourage consumers that use Internet commerce to protest the new tax measure.

The president of the Dominican Association of Couriers (Asodec), Jose Burdiez (who is the manager of UPS operations in the Dominican Republic), reiterated Asodec’s strong opposition to the new taxes.

The courier companies predict that the new taxes will dramatically reduce Internet purchases and that the loss of this business will also negatively impact Dominican exporters that take advantage of the empty cargo space on freight airliners to ship their goods to foreign destinations.

The courier companies predict that the new taxes will dramatically reduce Internet purchases and that the loss of this business will also negatively impact Dominican exporters that take advantage of the empty cargo space on freight airliners to ship their goods to foreign destinations.

The Internet tax case is being heard in the Superior Administrative Court (TSA).

Owners of stores represented by the National Commercial Business Organization (ONEC) call Internet purchases unfair competition and lobbied with the Customs Agency for equal taxation. Fernandez took their side saying that the Internet purchase exemption was being used by businesses to import goods without paying taxes, which was unfair competition for the retail stores.

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