Monday, October 14, 2019

Puerto Rico legislative leaders close ranks on inventory tax

By on October 4, 2018

Senate President Thomas Rivera Schatz, second from right; and House Speaker Carlos “Johnny” Méndez Núñez (Courtesy)

CEIBA, Puerto Rico – The House of Representatives’ speaker and the Senate president, Carlos “Johnny” Méndez Núñez and Thomas Rivera Schatz, respectively, said Wednesday that the issue of the tax on stored inventory should be part of the discussion over tax reform.

“We can differ with the governor with a lot of respect, but the opinions I hear on the street is that with the inventory tax we cannot advance economic development. We have a meeting with the Senate team to talk and see what’s on the table, to then reach an agreement and discuss it with the Executive,” Méndez Núñez replied to questions from the press.

“I agree with the president of the [lower] chamber. This should be the opportunity to address all that has to do with the tax reform, not leave anything pending and not address anything separately,” Rivera Schatz said.

“Precisely because several colleagues from both the House and the Senate have particular opinions, which must be respected and listened to, is why I invite the governor to convene the Legislative Conference, which has not been convened in months. Five weeks left and we have the Tax Reform, the Incentives Code, the revision of the Civil Code, the fiscal adjustment that is going to have to be legislated to make the agreement with the bondholders viable, the transformation of the electrical system, among many other measures. I heard the governor wants to meet with the chair of the Senate Treasury [Committee (Migdalia Padilla)] and the chair of the House Treasury Committee [Antonio “Tony” Soto]. I think he should meet with everyone because this will not be decided by the chair of the Senate Finance Committee and the chair of the House Finance Committee,” Rivera Schatz added.

In a press conference, Gov. Ricardo Rosselló Nevares said the elimination of the tax on stored products should be discussed separately from the Tax Reform bill.

“That discussion has to be with the mayors in order to find a solution,” Rosselló Nevares said. “I think we have to find a solution, but it has to be apart from the Tax Reform,” he reiterated.

Meanwhile, Sen. Migdalia Padilla opposed the proposed elimination of the inventory tax.

“We must be very careful with the type of amendments we could make over what was already presented in principle to the [fiscal oversight] board by the governor and that now, with the amendments wanted, it gets vetoed and Tax Reform comes to halt. My position in this is that I cannot take the little that municipalities have,” Padilla said to questions from the press.

Most mayors from both parties oppose the elimination of the tax on inventories.

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