New Taxes Approved by Congress

Despite ample opposition from business groups, the Dominican Congress passed bills imposing a 2% tax on all imports, a 5% tax on the exportation of all goods and services, and a US$10 increase in the departure tax. These taxes had been enacted by decree by President Mejía a few months ago and then declared unconstitutional by the Dominican Supreme Court based on the argument that taxes can only be imposed by an act of Congress as established by Article 37 of the Dominican Constitution. The new taxes are designed to meet the level of resources required by the International Monetary Fund to resume its assistance program to the Dominican Republic.

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Turning Point in Dominican Criminal Justice

The Chief Justice of the Supreme Court announced recently Resolution 1920-2003. The High Court's Resolution constitutes an extraordinary event in the history of Dominican Criminal Procedure by acknowledging twenty-one
fundamental principles that are mandatory in every criminal process. The following four specific provisions are to be applied inmediately as a preparation for the application next year of the New Code of Criminal Procedure:

(a) The transformation of the Court's physical structures. Before, the defendant sat alone in a bench in front of the judge(s) preventing him from consulting with his lawyer. The Resolution allows the defendant to sit, American-style, next to his lawyer at a table in front of the judge(s).

(b) The defendant's attorney will now be able to cross-examine witnesses directly. Before, all questions had to be asked through the presiding judge.

(c) Bail will now be granted only after a public hearing, not by the judge alone after review of the written record.

(d) The presence of the defense attorneys will be permitted during the preliminary investigation phase by the "Juez de Instruccion", the equivalent of the Grand Jury phase in American criminal procedure.

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District Attorneys Forbidden to Issue Warrants of Arrest

The Attorney General's Office issued recently Resolution 14873-2003, stating that the Police and District Attorneys will now need a warrant from a Judge in order to imprison a suspect except if caught in the act of committing a crime or immediately after.

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Supreme Court Declares Taxes Unconstitutional

The Supreme Court declared unconstitutional Presidential decrees #727-03 and #139-03 which had imposed a 5% tax on exports and a 10% surcharge on imports as a response to recent economic difficulties. The controversial taxes were met with active resistance from the business community, who took the matter to court in August. The sixteeen Supreme Court judges ruled that taxes can only only be imposed by an act of Congress as established by Article 37 of the Dominican Constitution.

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Minimum Wage to Rise 25%

The National Wage Committee approved an increase of 25% in the non-sectorized minimum wage. The increase comes in two parts: 15% effective October and 10% as of 1 January. This will bring the monthly minimum wage
for companies with assets of more than RD$500,000 from RD$3,890 at present to RD$4,475. As of January, the minimum wage will be RD$4,920 for larger companies. Smaller companies are authorized to pay a RD$3,000 monthly minimum wage as of January, up from RD$2,295 at present.

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New Code for the Protection of Minors

President Mejía signed a bill adopting a new Code for the Protection of Children and Adolescents (Law #136-03) which will be in effect beginning August 7, 2004. The new Code will replace the present Code (Law #14-94) dating from 1994 and will change the existing rules governing custody, child support, adoptions, etc.

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Bill on Illegal Trafficking of Migrants

A new bill on the illegal traffic of migrants has been passed recently by the Dominican Congress. Law #137-03. Article 3 of the Bill defines the crime of trafficking with persons as including the transport of any individual for the purpose of sexual exploitation, even with the consent of the individual, and provides for stiff sanctions: fifteen to twenty years imprisonment and a fine of 175 times the minimum salary. No mitigating circumstances are allowed to lessen the punishment.

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5% "Temporary Contribution" on Exports

President Mejia enacted by Decree #727-03 a "temporary contribution" of 5% on all gross income derived from the export of goods and services, as part of the government efforts to ease the effects on the population of the devaluation of the peso caused by the bankruptcy of the Baninter Bank. Income from the tax will be used to subsidize electricity prices for the general population.

The Decree has been criticized as unsound both on economic and legal grounds. The Dominican Association of Exporters (ADOEXPO) and other business and legal associations of the private sector have filed a petition at the Supreme Court to declare the Decree unconstitutional based on Article 37 of the Dominican Constitution which establishes that only Congress can levy taxes.

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New Ministry for Export and Investment Created

Congress passed a bill on June 28 creating the Ministry for Export and Investment which replaces the Center for the Promotion of Exports (CEDOPEX) and the Office for the Promotion of Investments in the Dominican Republic (OPI-RD), with a new entity to be known as the Center for Export and Investment in the Dominican Republic (CEI-RD). The first director of the Center, Danilo del Rosario, announced the opening of 22 agencies of the Center abroad.

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Departure tax raised to US$20

The departure tax to leave the Dominican Republic is now US$20 or its equivalent in pesos, up from US$10. The government doubled the departure tax to help pay for the present economic crisis. The measure is part of the new taxes and charges the government is levying to have access to a package of about US$1 billion in fresh funds from multilateral institutions, including the International Monetary Fund.

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