Friday, July 19, 2019

Puerto Rico Legislature passes tax reform despite fiscal board objections

By on November 13, 2018

SAN JUAN – On the last day of the legislative session, Puerto Rico’s Senate approved a conference committee report on House Bill 1544, which amends the “Internal Revenue Code for a New Puerto Rico” to establish “the plan to simplify the country’s tax system,” the upper chamber announced Tuesday evening.

The tax reform measure will now be sent to Gov. Ricardo Rosselló for enactment.

The conference committee to address the discrepancies comprised Senate President Thomas Rivera Schatz; Senate Treasury Committee Chairwoman Migdalia Padilla; Senate Education Committee Chairman Áxel F. Roque; House Speaker Carlos J. Méndez; House Treasury Committee Chairman Antonio Soto and Rep. Pedro J. Santiago.

“The conversations have taken place with the House and Senate and officials of the executive without the [fiscal oversight] board,” Speaker Méndez said at a press conference, adding that he anticipated that the congressionally established entity will object to the measure’s passage.

”Experience tells me I can meet with Ms. [Natalie] Jaresko [the executive director of Puerto Rico’s fiscal oversight board] now, we reach some agreements and tomorrow [the board rejects] everything. It happened to us with the budget [bill], it happened now with the tax reform. So I wouldn’t be surprised. We can shake hands tonight and the next morning or early in the morning they are sending us letters opposing what they agreed to with us,” he reiterated.

On Monday, Jaresko sent a letter to the legislative leaders saying the board had not seen enough evidence that the video-lottery machines’ provision in the bill would not affect the fiscal plan.

Language in the bill regarding the powers of the Treasury secretary to reach tax-related agreements was worked on, which was a point of contention as well.

Among the changes to the measure was lowering the number of off-casino slot-gaming machines operators can own to 250 from 500. Despite the reduction, revenue estimates remained at about $180 million.

In addition, the savings that must be in place in case revenue estimates are not met were increased by $20 million. Also, the reduction of the sales and use tax on prepared foods was postponed until October. The other items considered in the measure would come in effect in early 2019.

The speaker said the bill that sought to change pensions for mayors remains pending for the next session. Another measure that was not passed dealt with industrial hemp.

As expected, the elimination of the so-called Stored Inventory Tax will be another measure left to be addressed in January.

–Cybernews contributed to this report.

Puerto Rico Senate president: Firms lobbying fiscal board over video-lottery terminals

Fiscal board: Video-lottery terminal section in tax reform is inconsistent with fiscal plan

Puerto Rico gov: No problem in implementing tax reform bill in phases

You must be logged in to post a comment Login