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Bernier Asks Governor to Sign Bill Eliminating IVA, B-to-B Tax Increase

By on May 20, 2016

SAN JUAN – The president of the Popular Democratic Party (PDP), gubernatorial candidate David Bernier, asked Gov. Alejandro García Padilla to reconsider his position and not veto the bill unanimously passed in both the House and the Senate repealing the implementation of the value-added tax (IVA by its Spanish acronym) as well as a tax increase to transactions between businesses (B-to-B).

In a statement Friday, Bernier referred to a Treasury Department report presented Wednesday that showed sales-and-use tax (IVU) collection on merchandise exceeded 70%, while the B-to-B tax did not reach 50%.

PDP gubernatorial candidate David Bernier

PDP gubernatorial candidate David Bernier

The politician added that the report shows that taxes on service are easier to evade and harder to monitor, “so it is a big challenge to raise the $50 million projected by the Treasury.”

For the gubernatorial candidate, the tax on B-to-B services has been challenged by the vast majority of the economic players on the island, “so it could be counterproductive for the government of Puerto Rico to continue adversely impacting business sectors to try to collect such an inefficient and difficult tax to capture,” his statement reads.

“This tax adversely affects micro and small businesses because a large company may have its legal or accounting services needs already on its payroll, while small companies have to hire these services, on which we are levying a tax. This business-to-business tax hurts small businesses while giving a competitive advantage to larger companies,” Bernier stated.

He added that “For this reason, he asked the governor to…sign the measure…, which in the end hurts 85% of [Puerto Rico’s] commercial sector and does not generate enough revenue to offset the adverse impact to our economy,” the former secretary of state concluded.

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