Tuesday, January 31, 2023

House Reps File Bill to Postpone IVA Until Next Year

By on January 26, 2016

SAN JUAN – Reps. Waldemar Quiles Rodríguez and Gabriel Rodríguez Aguiló, both from the New Progressive Party (NPP), announced the filing of a bill aimed at postponing the implementation of the value-added tax (IVA by its Spanish acronym) until June 2017. The bill would amend sections 6110.04, 4020.01, 4180.01 and 4180.02 of Act 1 of 2011, known as the Internal Revenue Code for a New Puerto Rico.

The bill’s foreword states that “since the approval of the IVA in 2015, a number of transcendental situations have taken place that affect our economic perspective. Furthermore, renowned economists have warned about the disastrous effects the imposition of an IVA would have on the island’s already battered economy.”

Among the negative effects of implementing the IVA, the legislators include the “inevitable increase in the cost of living, because the cascading effect of the tax would increase the cost of goods and services for consumers.”

Act 72 of 2015 amended Act 1 of 2011 to, among other purposes, implement a 10.5% IVA, which added to the municipal portion, would total 11.5%. Before the IVA was to go into effect, a transition period from the sales and use tax (IVU by its Spanish acronym) was set until April 1, 2016, when the new tax is slated to go into effect.

The Mayors Federation, through its president, Guaynabo Mayor Héctor O’Neill, has insisted that the implementation of the IVA would result in another shock to the economy at the municipal level.

“We cannot ignore the implications of the IVA’s implementation; it would require the acquisition of technology as well as training of personnel at all levels,” the legislators argue in the bill. “The imposition of the IVA without further consideration, without having the required technology and preparation, could represent greater problems for the fragile Puerto Rican economy.”

You must be logged in to post a comment Login