SANTO DOMINGO – In a significant legislative move aimed at bolstering small business viability, National District Senator Omar Fernández has once again tabled a proposal to exempt micro, small, and medium-sized enterprises (MSMEs) from mandatory advance income tax payments. This marks the fourth occasion the senator has introduced this initiative, underscoring a persistent effort to reform fiscal policy for Dominican Republic’s smaller economic players.
The contentious advance payment mechanism requires businesses to prepay income tax based on projected future profits. Senator Fernández contends this system creates an undue financial strain by compelling companies to pay taxes on revenue they have not yet realized, thereby severely constricting their operational liquidity and growth potential. He emphasized that with over 85% of nationally registered enterprises falling into the micro or small category, establishing a more supportive tax framework is critical for national economic development.
Fernández further argued that the proposed elimination would have a negligible adverse effect on overall government tax revenues, while simultaneously acting as a catalyst for enhanced economic dynamism and entrepreneurship. The senator’s legislative agenda extends beyond this single measure, incorporating additional proposals to abolish property tax double taxation for seniors over 65, eradicate mortgage-related taxes, remove advance tax obligations for the agricultural industry, streamline tax compliance procedures, and initiate comprehensive modernization of the nation’s commercial and judicial frameworks.