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Pierluisi asks García Padilla to Postpone VAT and B-to-B Increase

By on January 24, 2016

SAN JUAN – Following a detailed account of the negative effect the measures adopted by the administration of Gov. Alejandro García Padilla have had on the island’s economic and fiscal situation, the president of the New Progressive Party (NPP), Pedro Pierluisi, has asked the governor to postpone the implementation of the value-added (VAT) and business-to-business (B-to-B) taxes.

In a letter to both García Padilla and Popular Democratic Party (PDP) gubernatorial hopeful, David Bernier, Pierluisi says there is still time to stop the introduction of the VAT, which the NPP leader says will “surely bring the island’s battered economy to a halt.” The VAT comes into effect April 1.

“Due to that and for the welfare of the people of Puerto Rico, is that the  delegations of the New Progressive Party in the House and Senate will present legislation to stop, indefinitely, the implementation of the VAT system, as well as the increased B-to-B taxes,” Pierluisi says in the letter he sent to the governor on Sunday.

Pierluisi also reminded the governor that “since very early in 2013, I have presented solutions to the economic and fiscal problems we face as a people. In this regard, we reiterate that we continue to be in the best position to contribute in drawing up measures that address this crisis,” he wrote.

In his letter, Pierluisi says the “solutions implemented in the short, medium and long terms must and should be framed by the pursuit of economic growth, which is only possible by reducing the tax burden on the people, especially those that affect the pockets of the working class, and of small and midsize businesses, which are the backbone of our economy.”

Pierluisi added that it is necessary to restore government spending to 2012 levels, reducing unnecessary expenses, including advertising and contracting.

The also Washington resident commissioner says that of equal importance is to take measures to strengthen oversight and reduce tax evasion. “All of these measures have been part of the solutions we have presented over the past three years.”

Expressing confidence in the support of the of PDP delegations in the Legislature to approve those proposals, Pierluisi reminded the governor that since the beginning of his term, the NPP had warned of the adverse effects that a policy of new and increased taxes to reduce the revenue and government-spending gap would have on the economy.

“We have no doubt the VAT is a complicated system that will increase the cost of doing business in Puerto Rico, when we should be fostering the opposite. The implementation of such a tax system, along with an increase of the B-to-B tax from 4% to 10.5% will be devastating to our already ailing economy, because it will lead to more business closures, more Puerto Ricans losing their jobs and an acceleration of the already frenzied pace at which Puerto Ricans are moving to the States, among others,” Pierluisi said in his letter.

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