The Dominican Republic is currently undergoing an unprecedented economic transformation. The new government has set out to implement a series of fiscal reforms. This plan aims to boost state revenue to drive the country's long-term development across various sectors. 

How do they plan to increase it? 

Many countries are looking for greater digitalization and tax simplification. However, governments also aim to improve the quality of life and the national economy, although this is usually achieved through tax increases for citizens and businesses. 

The Dominican Republic has developed a strategy to achieve its goals: 

1. One measure involves increasing the budget for public safety to strengthen the National Police and Armed Forces. This is expected to reduce crime rates. Crime continues to be a significant issue, although some improvements have been noted compared to a few years ago. However, in recent months, it has increased in certain sectors, potentially deterring greater investment. 

1. Another option is to invest in road infrastructure to alleviate traffic congestion. 

1. A 50% increase in allocations to municipalities is also planned to promote cleaning services. This action will positively impact the reduction of health problems caused by waste (dengue, respiratory problems, etc.). 

1. Furthermore, a large portion of the resources obtained from this reform is intended for the creation and promotion of a free healthcare system. This will benefit the entire subsidized healthcare system, meaning approximately 6 million people will gradually be enrolled. 

Macroeconomics in the Dominican Republic 

Currently, the Dominican Republic has a deficit of 3.1%, and with these reforms, it aims to reach a deficit of 1.5%. This reform has already begun to yield results. In April 2025, the General Directorate of Internal Taxes (DGII) reported that state revenue for that month reached a historic figure of 102.92 billion Dominican pesos ($1.74 billion), marking the first time over 100 billion has been collected in a single month. This figure also surpassed the revenue collected in the same month of 2024 by 8.6%. 

Accumulated revenues for the January-April 2025 period reached 321.28 billion Dominican pesos ($5.42 billion). This represents a 6.2% increase, or 18,886.4 million Dominican pesos more than the same four-month period last year, when revenue was 302,398.9 million Dominican pesos. 

State revenue 

The main taxes collected have been: 

• Corporate Income Tax and Asset Tax, which saw an 8.26% increase. 

• Tax on the Transfer of Industrialized Goods and Services (ITBIS). This tax showed growth in both total and taxable operations of 14.8% and 9.3%, respectively. This increase pertains to the March 2025 fiscal period, which was paid for in April. Total, the ITBIS collection for this period was driven by activities in hotels, bars, restaurants, commerce, and other services. 

• Personal Income Tax, which experienced growth driven by an increase in the number of salaried employees. A total amount of 1.09 billion Dominican pesos ($18.4 million) more was collected than in April 2024, for a total of 11,924 million. 

The reform is already proving effective in increasing revenue. Now, it remains to be seen whether the various sectors in which the government has committed to investing these taxes achieve the expected results. This will also enable the Dominican Republic to offer greater security to its investors, which will be reflected in increased investment in the country, keeping it on its current growth path. 

The Latin American and the Caribbean market is booming due to the wealth of opportunities: it offers countries close to the United States and located between North America, Central America, and South America. 

Therefore, if you're looking to expand your multinational corporation or fund into the Dominican Republic, you can count on us for accurate and secure management of your tax obligations in the country. 

We invite you to contact us via our form for a personalized consultation. 

At Auxadi, we offer comprehensive services in accounting, tax, payroll, and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 22 proprietary subsidiaries, our advanced technological platform and proven methodology enable us to guarantee efficient management in compliance with local regulations.