This report sets out some of the short-, medium- and long-term challenges for fiscal policy in the Dominican Republic. The population’s spending demands must be met but macroeconomic sustainability must be maintained. In particular, public finances must be sustainable in the long term to create the stable, predictable financing needed to meet the commitments set forth in the National Development Strategy. The environment must minimise the distortions created by tax policy and more broadly by fiscal policy. The recommendations made in this document focus on certain instruments that can generate revenue to finance spending needs and reduce distortions, paying special attention to the role of institutions and the political economy in the reform processes. The Dominican tax system is highly fragmented, making tax administration difficult and facilitating tax evasion and avoidance. In particular, the prevalence of tax exemptions reduces the tax bases and makes tax administration very difficult. The tax code dates from 1992, but the bulk of tax legislation lies outside it; this code therefore needs amending to consolidate tax legislation and create stability and legal transparency.