The customs tariff is primarily a revenue-raising instrument, although it is occasionally used to protect local industry. In the 1960s and early 1970s, import duties constituted the greatest single source of government revenue (accounting for 40–45% of the annual total during 1964–70), but by 1986 the share of import duties in government income had fallen below 30%. Export duties provided only about 5% of government revenues in 1986. In September 1990, a government decree simplified the tariff schedule to six categories, with seven tariff rates, ranging from 5% to 35%.
As of 2001, the maximum basic tariff rate stood at 20%, but there were also levied a luxury tax of up to 60% on "nonessential" goods, a 5% exchange surcharge placed on all imports, and an industrialized goods and services tax of 12% levied on processed goods.
There are no free ports, but at least 19 industrial free zones have been established at locations including La Romana, San Pedro de Macorís, Santiago de los Caballeros, Baní, and Puerto Plata.
In 1998, the Dominican Republic helped to establish the Central American–Dominican Republic Free Trade Area (CADRFTA). The country also has an agreement with CARICOM and Western Hemisphere governments for a free trade area by 2005.