House leaders to press fiscal board on suspending ‘crudita’ tax.

Speaker of the Puerto Rico House of Representatives Carlos “Johnny” Méndez Nuñez

By THE STAR STAFF

Speaker of the Puerto Rico House of Representatives Carlos “Johnny” Méndez Nuñez, along with House Government Committee Chairman Víctor Parés Otero and the rest of the majority New Progressive Party delegation, will be seeking a meeting with members of the Financial Oversight and Management Board to request a temporary suspension of the first ‘crudita’, the excise tax on gasoline and diesel established in subsections (a), (f) and (g) of Section 3020.07 of Law 31-2013 (Internal Revenue Code for a New Puerto Rico), as well as its eventual repeal.

The “raw” tax was imposed by the administration of then-Gov. Alejandro García Padilla through Law 31-2015.

In total, the treasury collected $141.6 million in fiscal year 2023 from the tax.

“For this House of Representatives, reducing the tax burden on our people is a priority, especially in the area of gasoline, which is a pressing need for our people,” the House speaker said. “However, this cannot be done haphazardly or with irresponsible parameters that put the solvency of the Puerto Rico government at risk. That is why we are going to meet with members of the oversight board to determine the mechanisms that will allow us to suspend this tax for a specific time and, at the same time, identify the tools to repeal that law.”

According to the Department of Consumer Affairs, the price of gasoline today is $1.18 per liter for regular.

“On April 28, we commissioned the Budget Office of the Legislative Assembly of Puerto Rico to conduct a detailed study on the factors that influence gasoline prices at the pump, including excise tax platforms, with the goal of evaluating possible initiatives to mitigate the price increases our people experience when purchasing this essential fuel,” Méndez Nuñez noted. “The report presented was prepared using official and certified data from the Treasury Department and the Financial Oversight and Management Board for Puerto Rico.”

The results of the study indicated that for the fiscal year 2022-2023, the collections through Law Number 31-2015 totaled $141,600,000.00, which represents 23.8% of the total collections from petroleum products.

On Nov. 1, 2023, the Financial Oversight and Management Board for Puerto Rico signed a written communication detailing that the revenues from both ‘cruditas’ (Law 31-2013 and Law 1-2015) represent a significant part of the island government’s budget to support the cost of essential services.

They also emphasized that Articles 512 and 513 of Law 53-2021, as amended and better known as the “Law to End the Bankruptcy of Puerto Rico,” repeal the aforementioned articles, allocating the revenue from those excise taxes to the General Fund. Eliminating the excise tax contained in Law 31-2013 would provide a real savings of six cents per liter of gasoline and/or diesel at the pump and would represent a decrease of $120.6 million annually in revenue for the General Fund, the lawmakers said.