Wednesday, October 28, 2020

Pro-Business Industry Group Submits Proposal to Congressional Task Force

By on October 11, 2016

SAN JUAN — Empresarios por Puerto Rico (Entrepreneurs for Puerto Rico), a non-profit that groups local companies and aims to strengthen the island’s business sector, recently submitted its set of proposals to the bipartisan Congressional Task Force on Economic Growth in Puerto Rico, which has been charged with making recommendations to promote economic growth on the island, the group announced Tuesday.

The task force—which is chaired by U.S. Senate Finance Committee Chairman Orrin Hatch (R-Utah) and was established by the Puerto Rico Oversight, Management and Economic Stability Act (Promesa)—has received hundreds of other proposals from stakeholders before its Oct. 14 deadline.

The group submitted seven proposals to spur Puerto Rico’s economy. Among these is to relax visa requirements for international tourists and for students to stimulate Puerto Rican tourism and help internationalize universities.

“A similar relaxation is currently given to Guam, which is also another U.S. territory, noted a summary of the proposals. “It can potentially increase visitors to Puerto Rico by 10-20%.”

According to the Planning Board, total average expenditures of visitors was $757 in 2015.” If we increase the number of visitors by 15%, direct economic activity would represent $568 million [and in indirect activity,] $477 million,” it stated. Total employment generated would be 8,520 under this scenario.

Puerto Rico Tourism Co. promotional image

Puerto Rico Tourism Co. promotional image

The second proposal is to remove navigation acts such as the Jones Act, which according to the document, would imply a reduction in direct import costs of $426 million at current gross domestic product levels. A third proposal seeks to increase to 30 the number of hours that one can work to receive welfare benefits such as the Housing Department’s Section 8. “Working poor should be allowed to work more and to complement their incomes with welfare benefits,” the document reads.

The fourth proposal is to allow Puerto Rico to strengthen its nascent companies, as done in New York and San Francisco, among others cities where there are large protections for small and midsize businesses. “If half of the sales would have taken place in small and medium size enterprises (SMEs) in 2012 in the retail sector, total net direct employment in 2012 would have been 24,000 higher,” according to the proposal, which in turn would represent an additional $384 million circulating in the economy in the form of payroll and subsequent consumption.

The rest of the group’s proposals include creating transfer pricing regulations for multinational retailers to reduce tax avoidance and inequality with domestic competitors; extend Chapter 9 to future Puerto Rico bonds; and expand funding for Small Business Administration’s (SBA) Puerto Rico chapter and the U.S. Department of Agriculture, as well as include State Chartered Credit Unions and Economic Development bank as eligible participants for the SBA’s programs 7a and 504.

Such proposals, according to the group, complement the Private Sector Coalition’s proposals, such as amendments to section 245a and other groups like those demanding parity in Medicaid and Medicare funding.

“In terms of parity in Medicare, we especially ask for Low-Income Subsidy that is given for the 50 states but not for U.S. citizens in Puerto Rico,” the proposal states. “According to members of Congress, this could inject up to $400 million to the health system of Puerto Rico and prevent that the elderly population migrate to the states searching for parity, what could actually cost more to the states.”

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