HAITI'S FISCAL GOAL: RAISE INTERNAL REVENUES BY 25

UNCLAS PORT AU PRINCE 001643 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/CAR EB/IFD S/CRS SOUTHCOM ALSO FOR POLAD STATE PASS TO USAID FOR LAC/CAR INR/IAA (BEN-YEHUDA) COMMERCE FOR SCOTT SMITH TREASURY FOR JEFFERY LEVINE WHA/EX PLEASE PASS USOAS E.O. 12958: N/A TAGS: ECON EAID PGOV PINS HA SUBJECT: HAITI'S FISCAL GOAL: RAISE INTERNAL REVENUES BY 25 PERCENT REF: PAP 1609 ¶1. Finance Minister Daniel Dorsainvil and Charge signed a preliminary agreement September 1 to modernize Haiti's tax collection and administration in cooperation with the U.S. Department of Treasury, with funding from USAID. According to Dorsainvil, it is time to "bring in the tax man," but he stressed that it is also important for the government to use the increased revenues wisely. According to the Robert Joseph, deputy director of the Haitian internal revenue service (Direction Generale des Impots -- DGI),the FY06 collection through August is 5.74 billion Haitian gourdes (about US $ 147 million). The DGI projects internal revenue of 7.39 billion (about US $189 million) Haitian gourdes for FY07, which represents an increase of approximately 25 percent. The eighth DGI general assembly is in session this week in Jeremie, on Haiti's western coast, to discuss possible measures to increase internal revenue. ¶2. US DOT representative Charles Shea visited Haiti in June to examine the viability of a tax assistance project. Shea reports that ever since the initial conference in November 2004 where GOH officials came away with six objectives to increase fiscal responsibility, he has been greatly impressed with the seriousness with which the DGI has assumed their responsibility. Robert Joseph told econoff September 1 that he has been working on this project for two years and was thrilled to see it become official. (Note: Shea reports that Joseph is the driving force and continuity within the DGI. He has worked there for more than 20 years and was one candidate for director general two years ago. End note.) ¶3. Comment: Raising Haiti's revenues -- both internal revenue and customs taxes -- is one of President Rene Preval's primary concerns. Efforts to enforce customs on the Haitian-DR border is still meeting mild resistance (reftel), and portends the public's likely reception of increased fiscal responsibility. However, Dorsainvil seems undaunted, taking a "slowly but surely" approach. TIGHE