Wednesday, September 23, 2020

Puerto Rico Senate confirms Treasury Secretary Fuentes

By on August 20, 2018

(Courtesy)

SAN JUAN – Twenty-one days after being appointed to head the Puerto Rico Treasury Department, Teresita Fuentes, was confirmed Monday by the Senate during the first day of the fourth legislative session this term.  

Fuentes assumed the role after Gov. Ricardo Rosselló made former Treasury Secretary Raúl Maldonado his chief of staff, although he remains the government’s chief financial officer.

The Senate vote came just hours after it held a confirmation hearing in which senators asked about her trajectory and policy positions, although most of the discussion centered around tax reform and the incentives code, and in turn, led to discussions about the reliability and access of the information the government uses and provides.

Some lawmakers also questioned Fuentes about her disapproval of the value-added tax (VAT), but Senate President Thomas Rivera Schatz interrupted that line of questioning. “Forget about the VAT. We are not going to approve a VAT here,” he said.

Rather than discuss specific proposals contained in the tax reform, Senate Minority Leader Eduardo Bhatia focused on asking of the nominee to make sure tax reform and budget estimates were made with concrete numbers. “I’m of those who think that Puerto Rico’s biggest problem is neither the bankruptcy nor the hurricane; it’s the credibility,” Bhatia said.

The secretary explained that the Treasury Department is providing information to the legislative chambers but that there is a reliability problem with the systems and the collected data that are being used in the decision-making processes of both the government and the island’s fiscal oversight board.
Regarding the fiscal board, Fuentes said it sets the parameters; therefore, the measures in the tax reform and incentives code cannot go beyond the board’s directives.

“We are in the very willing to discuss alternatives. Certainly, we have a mandate from the fiscal control board that is requesting us the [tax] reform be neutral. That, obviously, was the straightjacket with which the reform was conceived,” Fuentes stated.

Addressing the relationship the between the fiscal board and the government, Sen. Cirilo Tirado asked Fuentes who she would follow if the board and Gov. Ricardo Rosselló gave conflicting orders, to which she replied, “I am part of this administration and my boss is the governor of Puerto Rico.”

Meanwhile, the Senate president advised the Treasury secretary to “do what is right, regardless of who gives the order,” because, he said, the fiscal board, the legislature and the governor are not infallible.

On tax reform, Rivera Schatz said his lawmakers are looking to strengthen the oversight elements to maximize revenue before considering having to raise taxes.
Likewise, the Treasury secretary assured the senators that the executive branch was not seeking to increase taxes but said the incentives code needs some revisions, which should be done in collaboration with the Economic Development Department.

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