The publication of standard 04-2022 of the General Directorate of Internal Taxes (DGII) has created a lot of confusion because there are those who think that they will have to pay more taxes, but this is not the case. What will happen is that from now on taxpayers will pay what corresponds to them.
First of all, we must clarify that This will only affect people who are covered by the Simplified Tax Regime (RST)a simplified system for those who report their income and pay their taxes each year.
According to the DGII, there are 20,500 taxpayers registered in the RST divided into 16,500 liberal professionals and 4,000 legal entities, of which 7,500 are doctors and 4,400 of them have average annual income of 3.3 million pesos, which is who the provision would affect. So if you are not part of this group do not worry, at least for now.
In plain terms, the basis of this rule is that there is a group of people who, either through ignorance or intentionally, do not report their income and expenses during the year correctly and end up paying less taxes than they should.
This can happen in two ways. One is that when a person has two or more jobs and does not select a single withholding agent, that is, a single company to make all the withholdings. When the Income Tax (ISR) deduction is made separately, the taxpayer is owed to the DGII.
The tax advisor and tax facilitator, Elvin Ramírez, gave as an example that If a person earns 50,000 pesos in one company and 50,000 in another and they deduct 2,000 in each one, they are only paying 4,000 and something instead of paying around 12,000 because their income amounts to 100,000.
From now on, the DGII will take into account that money that it stopped receiving because the employers did not withhold it and will deduct it from the taxpayer when he makes his declaration.
Both Ramírez and other experts on the matter have explained that it is not that more taxes have been applied, but that the DGII he looked for a way to charge for something he wasn’t charging for.
That is why the most affected by this provision are the people who have more than one job because they have been paying an undervalued tax and now they will be charged money that they were not paying, which, logically, will affect their pockets.
Another “distortion” that according to the DGII is intended to be corrected with this rule is to prevent taxpayers from benefiting more than once from the exemptions that correspond to them, whose cap is RD$416,220.
Due to existing distortions, there are those who enjoy this exemption in various ways and although their income is high they end up paying, in the words of Ramirez, a “chilata” because they get rid of paying that amount more than once.
The expert stated that taxpayers who enjoy the exemptions through wages and by other means they are practically receiving a gift from the DGII.
Those people will now be affected because since they benefited from more than one exemption, they had more money left.
“That means that if due to a previous distortion you enjoyed tax exemption practically twice, now you will only enjoy it once, that means you are going to pay more taxes” because there will be no money left in their favor, Ramírez explained. .
The expert made it clear that if a person has two salaries in different companies, they enjoy the exemptions in each one when they should pay taxes based on their joint income.
