CRIM has 2 weeks to identify an income source to replace inventory tax
By The Star Staff
The Municipal Revenue Collections Center (CRIM by its Spanish acronym) must draft a bill over the next two weeks that identifies how the $240 million that the inventory tax generates each year could be replaced.
The information was provided by CRIM Executive Director Reinaldo Paniagua Látimer this week after a meeting with CRIM Governing Board Chairman Jesús E. “Gardy” Colón Berlingeri and Gov. Pedro Pierluisi Urrutia.
Island mayors said the inventory tax cannot be eliminated without finding a substitute because it is a significant source of revenue for municipalities, most of which are having fiscal problems.
Paniagua pointed out that one cannot talk about the elimination of the tax without identifying a substitute considering that the CRIM collects some $1.1 billion annually and the inventory tax represents a substantial sum.
“We know that there is a claim from the commercial sector, and we are trying to strike a balance between the claims of the commercial sector and the urgent needs of the municipalities, and we have been entrusted with working on legislation that will be discussed with the governor, the Treasury secretary and the municipalities,” Paniagua said in a report aired by Foro Noticioso.
He insisted that the municipal governments do not disagree with addressing the issue.
“It cannot be eliminated all at once by creating a gap in what is the debt restructuring, the Center’s certified fiscal plan and the government’s fiscal plan,” he said.
Paniagua noted that the claim of the merchants has been primarily about the recurrence of the payment; that is, that they pay for the same item year after year as long as it is not sold. The intent is to create a single payment to be made when the item is sold.
“What we are looking for is to reduce the cost of doing business in Puerto Rico by paying for that item only once after it has been sold,” the CRIM director said.
The commercial sector has held the inventory tax responsible for the low product inventories on the island. However, Paniagua contended that this phenomenon, which worsened after the passage of Hurricane Maria in September 2017, was really due to logistics.