Government backs down from proposed 2021 tax hike
October saw the reversal of some government decisions, due both to rejection by citizens and to the occurrence of obvious errors, forcing a search for alternatives. A few days after the proposed 2021 budget was sent to Congress, the government announced that it was withdrawing from the proposal’s creation of temporary taxes, amid a strong negative public response. The government has now instead arranged for Barrick Gold and the banking sector to commit to advancing payment of future taxes, to cover the shortfall that would be caused by not increasing taxes.
A few weeks later, the government made the mistake of launching a country brand initiative using a promotional logo that many understood to be plagiarized, overshadowing what should have been an initiative to strengthen the position of the DR in the world as a tourism investment destination and trading partner. The government withdrew the promotion and started a new process for the design of the campaign’s promotional logo.
One reading of both events is that the government needs to establish more control over the quality of its decisions, in order to avoid reversing them. Another reading is that, despite these errors, the government is willing to reconsider its actions based on public reaction. Depending on the frequency of such reversals, confidence in the government team’s decisions could be undermined, or a reputation of government weakness under pressure could take hold.
Economic activity continues to recover, while the government works to prevent a resurgence of COVID-19.
In the political arena, the PLD, led by former president Danilo Medina, and the FP (People's Force), led by former president Leonel Fernandez, continue to fight to be the first opposition party to this government.
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