Thursday, March 23, 2023
Home   >   Economy   >   Autos   >   Puerto Rico business organizations rail against expected inventory tax bill

Puerto Rico business organizations rail against expected inventory tax bill

By on November 12, 2019

The Puerto Rico Capitol in San Juan (CB file)

Assure it would not address issue of having sufficient provisions to face a natural disaster

SAN JUAN — Members of the Puerto Rico private sector issued public statements Tuesday in rejection of a draft bill they are urging the island’s legislature to reconsider as it would cap the inventory tax businesses pay and exempt any amount over it from being taxed, which they assure does not address what they call a national security issue. 

They said the proposal Rep. Antonio “Tony” Soto and the chairman of the Municipal Revenue Collections Center (CRIM by its Spanish acronym), Javier Carrasquillo, intend to introduce only days before the legislative session ends would keep inventory levels on the island too low.​

“At this point, we still have not had access to the draft and, according to media reports, the private sector and Puerto Rican citizens’ call for the elimination of the inventory tax is not being addressed at all. We have been discussing and analyzing for almost two years and it does not seem prudent for them to want to pass a bill that does not address the situation concretely,” Retail Trade Association President Iván Báez said in a statement.​

Meanwhile, Liliana Cubano, president of Hecho in Puerto Rico, the Made in Puerto Rico brand, warned of serious long-term consequences if the measure were approved because, as she put it, “eliminating the inventory tax is not even talked about, but rather a fixed amount for five years as the period to find a substitute [to the tax] that they have yet to exert the will to produce. Our call is to not introduce it and not approve it.”​

For his part, Puerto Rico Automobile Distributors Association President Julio Ortiz stressed that experts, economists and citizens had reached a consensus on the issue, that not learning from experience and past emergencies would raise the risk of a crisis occurring on the island.​

“The issue of the elimination of the inventory tax is critical to preparing for another emergency since it not only impacts food and water, but also all supplies and throughout the year,” he said.​

They all stressed the need to count on having sufficient basic provisions and supplies throughout the island, citing official statistics that Puerto Rico only has an inventory sufficient for less than 20 days were the shipping supply flow to be somehow impaired.​

They also pointed to reports by Professional Market Research, which found that 2018 ended with an alarming percentage, of more than 20 percent, of aisle products out of stock and that 2019 was averaging 15.7 percent in out-of-stock products, or almost double the 8 percent with which other markets operate, so they will continue advocating for the elimination of the inventory tax by emphasizing that the island’s geography requires a tax system that does not penalize businesses for preparing and stocking up on supplies to face natural disasters.

“It is beyond belief that this tax has not been eliminated two years after the [2017] hurricanes [Irma and Maria] and we are talking about waiting five more years. This imposition has transcended from being a bad tax to being an obstacle to the security of the people and for the economic recovery of the country. The pressure exerted by the mayors on the legislature has certainly been stronger than the duty to the people of Puerto Rico, thus we request that this measure is reconsidered and not approved,” said Kenneth Rivera, the former president of Puerto Rico’s Chamber of Commerce and CPA Society.​

The private sector representatives demanded that the government tackle the issue seriously, not with temporary bills that do not address the root of the matter.

Consumer Affairs Dept. yet to find price-freeze violations
Puerto Rico minority mayors meet with new governor, Senate president
Repeal of Puerto Rico Inventory Tax Hinges on Municipal Solution

You must be logged in to post a comment Login