Salary Income Tax a Key Revenue Driver for Dominican Republic, Exceeding Projections

The income tax levied on salaries continues to be a cornerstone of revenue generation for the Dominican Republic's tax authority, the Dirección General de Impuestos Internos (DGII). In the first six months of 2026, this tax stream demonstrated robust growth, exceeding two-digit increases in five of those months.

Cumulatively, the tax on salaries experienced a 14% expansion between January and June 2026 when compared to the same period in the prior year. Dominican workers contributed 64.08 billion pesos through this tax during the first half of the year. This represents an absolute increase of 7.86 billion pesos compared to 2025, according to DGII records.

The total collected by the DGII from salary income tax surpassed the government's projections for the period, which had been set at 60.85 billion pesos. This resulted in a compliance rate of 105.3%. The contribution from salary income tax accounted for 12.4% of the DGII's total revenue during this period. Furthermore, its growth represented 18.2% of the additional 43.19 billion pesos collected by the DGII overall.

While significant, the tax on salaries ranks third in overall revenue generation. It trails behind the tax on industrialized goods and services (ITBIS), which brought in 126.09 billion pesos, and the corporate income tax, which generated 114.76 billion pesos.

According to the DGII, the positive performance of salary income tax is linked to improvements in the labor market and wage increases, leading to more employees being subject to the tax and higher amounts being withheld. Notably, only in March did the collections for this tax not exceed double-digit growth, reaching a 9.5% increase. February and May saw the highest percentage increases, at 17% and 16.9%, respectively. May also recorded the highest absolute amount collected, totaling 12.62 billion pesos.