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  • Writer's pictureThe San Juan Daily Star

Governor says he’ll likely veto new tax on car purchases

House Bill 826 would impose a 1% municipal tax on the purchase of motor vehicles in Puerto Rico.

By John McPhaul

Gov. Pedro Pierluisi Urrutia said Wednesday that he is inclined to veto House Bill 826, which would impose a 1% municipal tax on the purchase of motor vehicles, saying that it is a new tax.

“The public policy of my administration is not to favor new taxes,” the governor said in response to questions from CyberNews. “I saw that my party’s delegation in the House voted against this, specifically for that reason. I am going to continue monitoring the process and at the time I will set my position.”

“If what they are proposing is a new tax, I am not going to look on it favorably,” he added.

Houser Speaker Rafael “Tatito” Hernández Montañez argued that the cost of vehicles on the island will drop, since it will be possible to import a greater volume of cars without passing an increased price per unit on to the buyer.

“This bill represents savings for the consumer’s pocket, since it reduces the sale price of vehicles, lowers the cost of operation and the tax burden for dealers and increases the volume of car imports to Puerto Rico,” said Hernández Montañez, who authored the measure along with Reps. Jesús Santa Rodríguez, Juan J. Santiago Nieves and Ángel Fourquet Cordero.

The Popular Democratic Party legislators said the measure would allow Puerto Rico to become an important car distribution center in the Caribbean, since the current tax would be reduced by 8%, thus promoting economic development on the island, apart from the increase that would be seen in car sales.

Several mayors, such as Bayamón Mayor Ramón Luis Rivera Cruz, do not favor the measure, while Mayors Association President Luis Javier Hernández Ortiz believes that other alternatives can be examined that do not raid the consumer’s pockets.

The bill was approved in the island House of Representatives on June 18, 2021, and the Senate endorsed it with amendments Tuesday, so it will now return to the House to concur with the version approved in the upper chamber.

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