Sunday, May 28, 2023

Government of Puerto Rico rejects approved tax in US reform

By on December 11, 2017

SAN JUAN – Puerto Rico Gov. Ricardo Rosselló, Resident Commissioner Jenniffer González, Senate President Thomas Rivera Schatz, House Speaker Carlos Méndez, majority lawmakers of both legislative bodies and the Federation of Mayors expressed their opposition to the 20% tax approved in the U.S. House’s tax reform bill.

“This tax would represent an additional hit to the island’s economy after the passage of hurricanes Irma and María, in addition to the fiscal problems we were having before the weather events,” the governor said in a meeting at the island’s Capitol on Sunday.

Support was reiterated for federal incentive initiatives proposed by the resident commissioner to create jobs in Puerto Rico. (Courtesy)

At the meeting, they also affirmed that the administration rejects the payment of taxes additional to those currently paid without having representation in Congress and equal treatment in federal programs.

In addition, support for federal incentive initiatives proposed by the resident commissioner to create jobs in Puerto Rico was reiterated. These measures include the business areas, credit for work and child tax credits, among others.

“My call is to Congress. If you established public policy with [the federal law] Promesa, whose objective was to develop the economy and be able to have fiscal stability, how then are we going to achieve it? It cannot be achieved with penalties or cutting what is already a basis of economic development in Puerto Rico. It has to be achieved by treating it fairly and removing the penalties for Puerto Rico,” Rosselló said.

US Government supports Promesa, fiscal board in court filing

Meanwhile, the legislative leaders, the resident commissioner and the governor agreed that the colonial status of Puerto Rico is the main obstacle the island faces to be included in federal tax reform, since the island has a voice but no vote in Congress.

However, they assured that they are on the same page and working as a team to ensure the island benefits from what is proposed in Washington, D.C.

The president of the Senate assured that all the alternatives presented by the executive branch and the resident commissioner in Washington are “consistent” with the Plan for Puerto Rico and “are not incompatible with the desire to get Puerto Rico admitted as a state of the Union as it should.”

The call was joined by the governor who stressed that were Puerto Rico to have a vote in Congress, the situation would be very different because, it will not cost” members of Congress “a vote.”

Puerto Rico governor in NY to lobby for post-hurricane reconstruction, fair treatment in tax reform

He questioned the double standard of some congressional legislators who, on the one hand, came to the island and pledged to back economic initiatives after the passage of Hurricane María but support the federal tax reform.

“We are now going to see if it is true that the American citizens who live in Puerto Rico have that same treatment. Here we’ll see if it is true that all the members of Congress who came here to see the fallen bridges, torn roofs, the limitations here, if they are really going to take action.

“If they do not take action in this tax reform to treat Puerto Rico fairly, they are going against their commitment to the Promesa law and what they said here at press conferences. This has to be fought,” asserted the governor, reiterating that Congress cannot continue to impact the economic development of Puerto Rico with penalties.

Likewise, Rosselló stressed that the Promesa task force submitted a report to Congress that emphasizes Puerto Rico should be include on tax reform issues and that jobs created on the island are U.S. jobs. Neither of the bills debated in Congress on federal tax reform included the island.

Resident Commissioner says she has made progress in favor of Puerto Rico

Meanwhile, the resident commissioner said that if “we did not have the state of defenselessness [colonial status] we would not be discussing whether we are foreign or domestic.”

“Because of our colonial situation, the federal tax reform classifies us as a foreign jurisdiction. Faced with this defenselessness, they have placed an additional 20% tax from a sales tax on products that are manufactured in Puerto Rico. This tax goes against what should be the economic development of the island,” the resident commissioner said.

González Colón commented that a tax incentive to section 199 domestic companies was added to the House bill, which allows an additional 30% to 35% paid on the island in incentives for reimbursement of the rum tax.

You must be logged in to post a comment Login