State wants USD500 million tax payment to clear Verizon Dominicana sale

20 Jul 2006

The government of the Dominican Republic is demanding USD500 million from fixed and mobile operator Verizon Dominicana to clear the takeover of the company by Mexico’s América Móvil, according to Reuters. América Móvil struck a deal to acquire Verizon Communications’ 100% interest in Verizon Dominicana for USD2.062 billion in April. Telecoms regulator Indotel approved the deal in May. An unnamed government official said the USD500 million was a compulsory tax levied on income from the sale. Verizon Dominicana has declined to comment, but a lawsuit from the government’s internal revenue department, demanding payment of the tax and temporarily blocking the Verizon sale was reportedly filed in a Dominican court late last month. The court was given 60 days to rule on the case, but President Leonel Fernandez was due to meet with senior tax officials and the head of Indotel this week to try to reach an out-of-court settlement, a presidential spokesman said.

Dominican Republic, Claro Dominicana (Codetel)