In a remarkably accelerated legislative process spanning just six days, the Dominican Republic’s ruling government has enacted a sweeping new tax reform billed as a buffer against economic turbulence sparked by the Iran-U.S. conflict. The policy push began June 11, when Minister of Finance and Economy Magín Díaz first unveiled the administration’s anti-crisis plan, framing targeted tax adjustments as a critical defense against global market shocks triggered by the Middle Eastern tensions. Just one week after its initial public presentation, the legislation—officially titled the Law of Measures for economic growth, tax simplification, and mitigation of the international crisis, recorded as Law 30-26—secured approval from both chambers of the National Congress and was signed into law by President Luis Abinader.
The legislative timeline moved at an unprecedented pace: the bill was formally introduced to the Senate the Friday after Díaz’s announcement, with Senate President Ricardo de los Santos quickly convening a 11-member bicameral steering committee led by Senator Pedro Catrain to advance the draft. Just five days later, senators passed the bill under an urgent expedited procedure, adopting minor modifications to three key articles that adjusted tax rules for lottery retailers and removed import tariffs on fire trucks and ambulances before sending the text to the Chamber of Deputies. Deputies followed suit the very next day, approving the bill through back-to-back readings under emergency procedures, clearing it for presidential signature. President Abinader formalized the law immediately after completing a public appearance opening a new waterfront park on Santo Domingo’s Malecón.
In an official press release announcing the law’s enactment, the National Palace emphasized the urgent need for the reform amid a global landscape defined by economic and financial instability. The legislation, the statement argued, is designed to reinforce fiscal discipline, shore up the long-term sustainability of public finances, and improve the predictability of national economic management—all to boost the Dominican state’s ability to respond quickly and effectively to shifting domestic and global economic challenges. The core fiscal goal of the new law is to generate an additional RD$50 billion in revenue for the national General State Budget by raising tax burdens across multiple sectors of the economy, which administration officials have positioned as a necessary step to absorb the economic fallout of the Iran-U.S. conflict.
However, the extraordinary speed of the bill’s passage has drawn sharp criticism from opposition lawmakers, who have also raised alarms over the distribution of the new tax burden. Ahead of the final vote in the Chamber of Deputies, Rafael Castillo, spokesperson for the opposition People’s Force (FP) party, publicly lamented the prioritization of this tax bill over long-delayed structural reforms, noting, “How great it would have been if the Social Security Law, which is 14 years overdue, had been approved in a (similar) period or if we had dealt with the Labor Code using this same process.”
Opposition legislators put forward more than 10 amendments to the draft bill during the Senate debate, but ruling party lawmakers from the Modern Revolutionary Party (PRM) ultimately rejected all changes, explaining that approving opposition amendments would send the bill back to the Senate and delay its enactment. Opposition representatives have highlighted specific provisions that they argue will raise costs for ordinary working Dominican families. FP Representative Carlos de Pérez argued that the new law imposes higher taxes on the annual Christmas bonus, commonly referred to as the 13th salary, and adds a 2-peso per gallon increase to domestic fuel prices on top of existing taxes and tariffs. “If we look at it closely, this reform will end up affecting the table and the pockets of every Dominican because it taxes fuel, which makes everything more expensive,” de Pérez explained.
He added that the law also raises the tax on liquefied petroleum gas (LPG)—the primary cooking fuel for most Dominican households—by 174 pesos per metric ton, meaning “turning on the stove at home to cook and eat will cost a little more.” De Pérez also questioned why the administration and ruling legislators rejected calls to exempt basic staple goods including rice, beans, eggs, and chicken from the existing Transfer Tax and Industrial Goods (ITBIS), a value-added tax, arguing, “that is the flag of the Dominicans” that should be protected from additional price pressures. The FP caucus also reiterated its longstanding demand, led by Senator Omar Fernández, for a full, rather than partial, adjustment of the Income Tax (ISR) bracket to match the country’s current annual inflation rate. While the reform does raise the lower income tax threshold from 34,000 to 39,000 pesos annually, de Pérez noted that this adjustment falls far short of matching inflation, adding: “If the cause the Government announced was the war in the Middle East and that disappeared, the most decent thing would have been for the project to have disappeared as well.”
Not all opposition figures rejected the entire reform, however. Some members of the center-left Dominican Liberation Party (PLD) acknowledged that the legislation includes several positive, targeted provisions that will benefit vulnerable groups and small businesses. Representative Ydenia Doñé highlighted the full elimination of advance tax payments for micro-enterprises, a 3% reduction in inheritance tax for transfers between parents and children, and a new special tax deduction for educational expenses for families caring for members with disabilities as welcome changes included in the new law.
