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Puerto Rico gov’s rep to fiscal board: New policy is not retroactive

By on August 23, 2018

SAN JUAN – Puerto Rico’s Fiscal Agency and Financial Advisory Authority (AAFAF by its Spanish acronym) told the island’s Financial Oversight and Management Board this week that it will not provide it tax incentive decrees issued to manufacturing firms after June 2017 for its approval.

In a letter addressed to the fiscal board’s general counsel, Jaime El Koury, AAFAF Director Christian Sobrino, who is also the governor’s representative to the fiscal board, said that after the oversight panel made the document request public, numerous manufacturing, housing development and tourism firms expressed concern about the application of the board’s new policy to be privy to the tax decree documents.

Sobrino told the board that it has the power–under the Puerto Rico Oversight, Management and Economic Stability Act–to approve or not tax decrees before their execution, but not after they have been conferred. He said that, instead, AAFAF will only submit reports on those decrees.

Board Executive Director Natalie Jaresko said she knows Sobrino and herself share the same view regarding the importance of being able to implement the fiscal plan and expressed hope the two can reach an agreement on how best the board can fulfill its mandate.

“In all cases, the primary goal is to ensure consistency with the fiscal plan. I am not looking to determine conflicts of interest, legal issues…. Our goals are to determine consistency with the fiscal plan,” she said when asked if the board’s goal was to change the tax decrees that have already been signed.

Read the full text of the letter here.

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