Business associations lament veto of inventory tax

Puerto Rico Restaurants Association President Carlos Budet

Rivera Schatz welcomes committee

By THE STAR STAFF

Several associations representing the country’s main productive sectors expressed their disappointment Thursday with Gov. Jenniffer González Colón’s decision to veto House Bill (HB) 420, a measure that sought to eliminate the inventory tax.

“Puerto Rico lost today. With this veto, the Governor missed an opportunity to make history and stand with the people, despite the consensus of the Speakers of the House and Senate, whom we thank for their stance, vision, and for supporting the people and economic development,” Retail Trade Association (ACDET by its acronym in Spanish) President José González said in a written statement.

Mateo Cidre, president of Hecho en Puerto Rico (Made in Puerto Rico), added that “[t]he inventory tax penalizes everyone: the citizen who can’t find essential products, the merchant who can’t plan, and the country that can’t compete.”

“Vetoing this bill is closing the doors to progress and prolonging a tax structure that the government itself has acknowledged as unsustainable.”

United Retailers Center (CUD) President Ramón Barquín stated that the decision represents “a setback for the country’s economic development.”

“We are deeply disappointed that, once again, political pressure has prevailed over the well-being of the country,” he said. “We thank the Speakers of the House and Senate, who not only approved the measure but also maintained a firm and public stance at all times for the benefit of the people, without succumbing to pressure from the mayors. We will continue fighting until this disastrous tax is eliminated.”

Puerto Rico Restaurants Association (ASORE) President Carlos Budet agreed that the decision harms both businesses and consumers.

“This veto is not only a setback for businesses; it is a loss for the citizen who pays more, for the company trying to grow, and for the country that needs development and stability,” he said. “Politics won, Puerto Rico lost.”

The spokespeople agreed that the veto of HB 420 represents a missed opportunity to modernize the tax system and reiterated their commitment to participate in the working groups between the executive and legislative branches, and the mayors to develop a fair and viable alternative.

“We will continue working with determination and unity,” González said. “Puerto Rico needs leaders who make decisions with a national vision, not with fear of losing political support.”

The conservative Dignity Project (Proyecto Dignidad) party echoed the business leaders in its own press release, in which it said it “deeply regrets” the veto of the bill, which the party said was “an essential measure to stimulate the economy, strengthen local commerce and reduce the cost of living for citizens.”

“This [inventory] tax has proven to be a detrimental burden for industry and the consumer, by forcing merchants to maintain minimum inventories, which makes products more expensive and limits the competitiveness of businesses in Puerto Rico compared to other jurisdictions,” the Dignity Project said.

The party went on to reaffirm “its commitment to the elimination of taxes that directly affect production and employment.”

“However,” the press release added, the Dignity Project “urges the Central Government to carry out a profound readjustment in its inefficient administrative structures, in order to channel to the municipalities the necessary funds to maintain essential programs that directly benefit the Puerto Rican people.”

Senate President Thomas Rivera Schatz, meanwhile, reacted to the statements of the governor, who acknowledged that her administration did not have a concrete proposal for eliminating the inventory tax, a measure that has been the subject of intense debate.

In a post on his social media, Rivera Schatz celebrated the creation of a new committee that, he indicated, will be tasked with developing the necessary alternatives to address the issue. “The Governor acknowledges that her administration’s plan didn’t include any specific proposals for eliminating the inventory tax,” the Senate leader posted. “Now she’ll include the one a committee will produce. Excellent!”

Rivera Schatz emphasized that the committee must swiftly present clear alternatives in order to move forward with serious reform.

“When that committee has and publicly presents its alternatives for elimination, without posturing, delays, or excuses, we will gladly consider them,” Rivera Schatz wrote.

He also warned that until there are defined proposals, the matter will remain “frozen.”

“Without the clear and concrete alternatives that we expect the committee to propose, the issue is frozen, and there’s nothing to be done,” the Senate leader wrote. “Without specific proposals, legislation without objectives will not be considered. Until then.”