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  • Writer's pictureThe San Juan Daily Star

Lawmaker seeks to create IVU-free zones in urban centers

Rep. Joel Sánchez Ayala

By The Star Staff

Popular Democratic Party Rep. Joel Sánchez Ayala has introduced legislation that seeks to create “sales and use tax-free zones” in the downtown areas, known in Spanish as cascos urbanos, of municipalities.

The idea is to exempt retail stores and restaurants from paying the sales and use tax (IVU by its Spanish acronym) for five years to promote economic activity and the repopulation of urban centers.

Public housing projects located in urban centers or downtown areas would also be exempted from paying the IVU.

Under the bill, the municipalities will have to submit yearly reports.

The bill is the latest attempt to revitalize urban centers and bring in economic activity. The rise of shopping malls and reduction of the island’s population have resulted in urban centers becoming ghost towns, the legislator noted.

For decades, the population and commercial displacement of urban centers went unnoticed in the face of the expansion of housing developments and the economic growth predicted by the commercial centers around those new homes, he said.

To repopulate Puerto Rico’s urban centers, addressing the deterioration of infrastructure is also necessary, Sánchez Ayala said. Currently, infrastructure is not limited to electricity, water, and communications services, but also includes security, transportation, sidewalks and parking, among other elements, he said.

Therefore, the economic development proposed by the IVU-free zones in the town centers must go hand in hand with proposals that allow a municipality to be better organized, facilitating a mixed use of space between homes and businesses.

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