Taxes on Dominican tobacco will not go; United States withdraws from the project

The Dominican Republic succeeded in getting the United States (US) Congress to desist from applying a tobacco tax which, if implemented, would have hit the local tobacco industry very hard.

The information was offered yesterday by the Minister of Industry and Commerce and Mypimes, Víctor (Ito) Bisonó, who emphasized that this was the result of an extensive work agenda developed by the Dominican delegation in Washington.

“This week we exhausted an extensive work agenda in Washington following up on communications sent to both houses of the U.S. Congress and shared updated information on the impact of the sector on our economy and our concerns about the initiative,” the minister indicated through his Twitter account.

Bisonó valued the progress of the discussions of the so-called Build Back Better bill, a plan of President Joe Biden that seeks to contribute to the economic recovery of the United States from the impact of the coronavirus pandemic, and pointed out that the current version of the initiative leaves Dominican tobacco and cigars out of its scope.

The minister recalled that this would have been a hard blow for this local industry because it would have had an impact on exports of up to 600%.

“In the event of the approval of this law, our cigar exports would be affected by more than US$650 million in the first year alone and would lose more than 40,000 direct jobs and a higher number of indirect jobs,” he said.

Concern

When these plans became known, much concern was generated in the country because if they were to be carried out, it would have been devastating for the Dominican tobacco industry.

Immediately, a delegation of Dominicans, headed by Bisonó, traveled to Washington, United States, to talk to U.S. congressmen about the negative impact this measure would have on the country.

“From the Ministry of Industry and Commerce and Mypimes (MICM) we continue to defend the sector, the jobs it generates and the almost 1.2 billion dollars we will export this year, giving tobacco and our cigars the place they have earned as a star product of our country,” the minister emphasized.

Exports to the U.S.

Last April, the MICM reported that tobacco exports to the U.S. market grew by around 50% so far this year.

In January alone, some 5.9 million Dominican cigars were exported to that country, according to the agency.

Exports

During the last five years, tobacco represented 15% of free zone exports and 8% of total exports.

Leadership

The DR has become one of the world’s largest exporters of organic tobacco and the leading producer of quality cigars.

Relaunch

Last year saw a relaunch of the tobacco industry to consolidate the country as the world’s largest exporter.

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