Act 60 Advocates:
Incentives Needed to Make Up for Local High Operating Costs
Despite criticism of tax breaks granted to attract investors to Puerto Rico, the incentives, particularly those aimed at luring export businesses and high net worth individuals, have helped certain local manufacturing operations stay afloat and even prosper while making the island a hub for cryptocurrency and blockchain entrepreneurs.
Puerto Rico’s Financial Oversight and Management Board (FOMB) issued an analysis last week of the commonwealth Treasury Department’s latest tax expenditures report detailing the loss of government revenue as a result of tax breaks and preferential tax rates to foster local investment and job creation.
The Treasury report identifies 438 tax expenditures that amount to $23.7 billion, compared with tax expenditures of $22.5 billion in 2017. Almost two-thirds of the expenditures, $14.8 billion, are in the form of preferential tax rates for foreign-owned manufacturing companies offered as incentives for operating in Puerto Rico.
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