Gov’t assures tax hikes are ‘beneficial’ for Puerto Rico economy
SAN JUAN – House Speaker Carlos “Johnny” Méndez and House Treasury Committeette Chairman Antonio “Tony” Soto justified the measures included in Gov. Ricardo Rosselló‘s fiscal plan of implementing increases to vehicle license fees, Automobile Accident Compensation Administration (AACA) insurance and property taxes.
After their meeting with members from the fiscal control board, both legislators explained that the measures, far from affecting taxpayers, will benefit the population and assured they will approve the plan as presented by the governor on Tuesday.
“In the case of the AACA, it will have an additional benefit because [we] will increase benefits for people who suffer any [car] accident. Same goes for the car license fee, as their increase is part of the AACA’s. Any type of increase, assuming there is also an increase to the comulsory insurance, is also because we are increasing benefits for the person involved in an accident,” Méndez said.
“In that sense, it’s not that you will pay more so we take more from you. You will have a benefit in case you get in an accident. Remember that what you pay is a premium, and that is for the risk of suffering an accident, so it isn’t something that will affect the person; it is to benefit them if an accident happened,” he added.
For his part, Soto said it is too early to discuss specific taxes, adding that all measures will be evaluated considering the island’s financial reality.
The Treasury Committee chair said that if the government increases people’s wages that would have a positive impact on the economy and the state would see more revenue enabling it to readjust tax rates.
“We have to see this vis-a-vis with the reductions that are being implemented in other tax areas and to ensure they create a balance. The state’s public policy stands firm against imposing new taxes–that is our campaign promise. We have a fiscal reality and we must find the delicate balance where we can collect the necessary amount to provide essential services without impacting people’s pockets too much,” he said.
Both legislators stated they will work toward lowering tax rates for individuals and corporations, as well as expanding the tax base.