Treasury Secretary says Embargoes have Intangible Value
SAN JUAN — The Puerto Rico Treasury Department has not received millions of dollars from businesses that have been shuttered over the past few weeks for failing to remit revenue from the sales and use tax (IVU by its Spanish acronym) to the agency, Secretary Juan Zaragoza said Saturday.
On Friday alone, internal revenue and tax-evasion agents embargoed five businesses in Carolina, Ponce and Toa Baja that owed approximately $2.2 million in IVU taxes to Treasury. Most of the businesses, which have 30 days to make payments or see their property sold in public auction, have filed for bankruptcy protection.
Zaragoza says there is more to the embargoes than just tax money. The agency’s actions have sent a message and caused IVU revenue to rise as many businesses are now filing their taxes.
“The value we get from doing this is intangible,” he told Caribbean Business.
Zaragoza replied to critics who have chided the agency for hurting the local economy, that the shuttered businesses had broken the law to begin with.
Many of the owners of businesses that have been intervened with did not remit IVU to the agency because they were using the money to maintain their upscale lifestyle and not because their businesses were suffering. Zaragoza said that when one of the businesses was shut down, the owners showed up in fancy cars and clothes to beg inspectors not to carry out the embargo.
“The critics are the same people who also complain when we do not do our part to increase the capture rate,” he said.
Many of the businesses that have filed for bankruptcy will eventually have to pay the money owed in taxes. Zaragoza added he is planning to challenge the bankruptcy protection filings for two of the businesses that were intervened with. In some of the cases, the agency is planning to file criminal charges for tax evasion in the coming weeks.