Senate Approves Repeal to IVA, B2B Taxes
SAN JUAN–The Puerto Rico Senate passed in a unanimous vote the House amendments that would repeal the tax hike to 10.5% from 4% in business-to-business transactions, also known as the B2B tax, and repeal the transition to a value-added tax (IVA by its Spanish acronym).
The upper chamber approved the substitute legislation for bills 2032, 2838, 2839 and 2840 without amendments. The legislation will now go directly to Gov. Alejandro Garcia Padilla, who has said he will veto it.
Senate Treasury Committee Chairman José Nadal Power said the repeal of the measures means the Treasury Department will not receive between $20 million to $25 million in additional revenues it was slated to get, but that the impact is small when taking into account the expenses that small and medium sized businesses will have to incur. He also noted that businesses are not ready for the tax.
Meanwhile, Senate President Eduardo Bhatia insisted the upper chamber was acting responsibly.
The House legislation came upon the insistence of Popular Democratic Party gubernatorial candidate David Bernier, who says the new taxes will further hurt the economy.