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LatinNews Daily - 27 April 2011

DR to phase out Free Trade Zone tax incentives

Development: On 20 April, Rafael Camilo, the director of the Dominican Republic's customs agency announced that the government was now ready to begin a gradual process of scrapping some tax incentives for companies operating in Free Trade Zones (FTZ), in line with a 2009 ruling by the World Trade Organization (WTO).

Significance: The DR's use of tax incentives to promote the establishment of companies in FTZs has been questioned by its trade partners - in particular the other Central American members of the free trade agreement between the US, Central America and the Dominican Republic (Cafta-DR). This has become more pronounced as the US economic slowdown has exposed free trade deficiencies between the Latin American partners.

Key points:

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