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Sales tax exemption of prepared food ends

By on May 26, 2020

Treasury chief: FOMB denies request for extension until June 15

SAN JUAN – The temporary exemption of prepared food from the 11.5 percent sales and use tax (IVU by its Spanish acronym) expired Monday after Puerto Rico’s Financial Oversight & Management Board (FOMB) rejected a request by the commonwealth government to extend the exemption to June 15, Treasury Secretary Francisco Parés Alicea said.

“After the Gov. Wanda Vázquez Garced announced the new Executive Order 2020-041, which goes into effect May 26 [Tuesday] and extends the curfew until June 15, 2020 in the face of the Covid-19 emergency, we submitted for the consideration of the oversight board a temporary extension of the IVU exemption on prepared food, also until June 15,” Parés said in a statement. “However, the oversight board informed us through a letter that the request was denied. Therefore, the IVU exemption on prepared food ends tonight [Monday] at 11:59 p.m.”

FOMB had approved an original IVU exemption extending from March 23 to April 30, and further extended the consent until Monday upon Vázquez’s May 1 curfew extension announcement. Parés said that the process for an extension request “is an ordinary one, established by the oversight board under the Orders, Rules and Regulations Revision Policy, as revised on October 2019.”

A portion of IVU revenue is earmarked yearly to pay bondholders with shares in the renegotiated Puerto Rico Sales Tax Financing Corp. (Cofina).

On Tuesday, former Puerto Rico Restaurants Association (Asore by its Spanish acronym) President Ramón Leal asked the fiscal board to reconsider the exemption on prepared food.

“Since the beginning of the emergency, we have called on the Treasury secretary and requested the exemption of the IVU on prepared food. Given that this is a fiscal matter, the Treasury secretary has to receive the approval of the oversight board. They approved it a first time, a second time and the third time; this time, it was a surprise that they didn’t approve it given that Puerto Rico is still in a state of emergency,” he said.

Leal also pointed out that the restaurants are withholding agents that send the charged tax to the government. “The benefit is for the people and the people are hard-hit. I don’t know who is it that doesn’t understand that the people have been battered,” he stressed.

‘Gradual’ resumption at Electronic Lottery

Meanwhile, José López Ramos, deputy Treasury secretary for the Puerto Rico Lottery, said that the Electronic Lottery will “gradually” resume Tuesday with games that do not require in-person draws, in compliance with the governor’s executive order.

“Players will be able to make their Powerball plays until 4:45 p.m. for Wednesday and Saturday draws,” López said in a statement, adding that these include Kino plays and Instant Games cards in authorized establishments. “Given that our priority is to protect the health of our people and that we are aware that the emergency for COVID-19 is still ongoing, we have determined to start only with these games. Eventually, we will carry out all the draws that were suspended due to the emergency and announce when the sale of Pega 2, Pega 3, Pega 4, Loto and Revancha will begin.”

Moreover, López announced the launching of a Electronic Lottery mobile application that allows players to scan their play tickets to instantly determine if they are a winner.

“It is a project we have been working on some time and we understand that it is the ideal moment to provide our customers with a tool that allows them to learn about the results of their plays in a quick and safe manner,” he said, adding that the application is available on Google Play and Apple Store.

López said that more information on draws may be obtained by logging onto the Electronic Lottery’s Facebook page,

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