Appraisal of Tax Incentives and Tax Policy Measures in the Dominican Republic

Description

The Inter-American Development Bank (IDB) is seeking a consultancy to conduct a rigorous economic and fiscal evaluation of specific tax incentive regimes in the Dominican Republic. The goal is to provide an evidence-based framework to help the government decide whether to maintain, reform, or phase out these regimes based on their actual contribution to national welfare.

Key components of this consultancy include:

1. Cost-Benefit Analysis (CBA) Framework
The firm will develop a structured framework to analyze the economic and distributional impacts of two specific policy regimes:

Border Development Zones (Zonas de Desarrollo Fronterizo).

Film and Audiovisual Incentives.

Hotel Subsector: Analysis of Advance Pricing Agreements (APA).

2. Analytical Pillars
Financial & Investment Impact: Determine if incentives are inducing "additionality" (new investment that wouldn't have happened otherwise) or merely rewarding projects that would have proceeded regardless.

Fiscal Analysis: Quantify foregone revenues (Tax Expenditure) across CIT, VAT/ITBIS, and import duties, while estimating "indirect recovery" through employment and consumption taxes.

Economic & Distributional Impact: Measure the net domestic value added, including labor externalities and the Foreign Exchange Premium. The analysis must show how benefits are shared between domestic labor, investors, and the government.

3. Global Minimum Tax (Pillar Two) Assessment
A critical task involves examining the implications of the OECD Pillar Two global minimum tax (15%). The consultant will:

Assess how Pillar Two reduces the effectiveness of local income tax-based incentives.

Estimate the impact of adopting a Qualified Domestic Minimum Top-up Tax (QDMTT) to prevent revenue leakage to other jurisdictions and preserve the country's investment attractiveness.

4. Implementation and Pilot Appraisals
The consultancy includes the execution of pilot appraisals for each regime to serve as representative cases. These will be used to create methodological guidelines that will standardize future tax policy analysis for the Dominican Republic.

Note: Interested firms must carefully review the registration requirements in the BEO Bidders Portal.