Wednesday, September 23, 2020

Fiscal officials expect passage of Puerto Rico tax reform

By on August 1, 2018

SAN JUAN – Puerto Rico Treasury Secretary-designate Teresa Fuentes and newly appointed Chief of Staff Raúl Maldonado agreed Wednesday on the importance of the legislature passing tax reform.

A proposed reduction of the sales-and-use tax (IVU by its Spanish acronym) to 7%, 11.5%, on food prepared and bought at restaurants, cafes and other establishments will not come into effect in August, as had been planned.

“No, because that legislation has not passed yet. If it had happened in June, it was for August. Now obviously, when August goes by, we will need 30 or 60 days to implement it,” Maldonado said in an interview on WKAQ radio.

Maldonado was appointed on Tuesday by Gov, Ricardo Rosselló to become his chief of staff, and remains the administration’s chief financial officer, while Fuentes was named Treasury secretary-designee. Both appointments are part of the changes announced by the governor to the composition of his cabinet.

“I’m sure that legislation [tax reform] will be effective now during the month of August. It really is legislation that allows the people to save the $850 million in taxes we are not going to charge in the Department of the Treasury, but will instead stay in the people’s pockets, and that will reactivate the economy, which will allow that the people can make new investments, both in their property as well as fostering consumption in important areas,” Maldonado said.

Fuentes, meanwhile, stressed the need for the legislature to pass the tax reform measures to provide relief to businesses and individuals.

“The priority is to approve the reform and implement it. That, that relief reach business and reach the individuals, the taxpayers. That is certainly the priority at this time,” said Fuentes, adding that it is not the time for major changes at the agency, but rather to continue with the plans underway.

“As soon as the reform is approved [fewer taxes will be paid]. This is the plan, that everyone pay less, provide that relief that everyone needs at the moment. That’s why this reform has to be approved to implement it immediately,” she said.

Maldonado added that “the reform, as it is, is neutral and was validated by the fiscal control board. Any amendment that the legislature tries to make has to include what funds will be used to maintain its character of a neutral reform.”

As chief of staff, Maldonado will begin a financial assistance process in the Department of Health and then continue with Family, Justice, Corrections, Mental Health & Antiaddiction Services Administration (ASSMCA by its Spanish initials) and other entities.

Both officials said the island is showing signs of recovery after the challenges and changes caused by Hurricane Maria.

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