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  • Writer's pictureThe San Juan Daily Star

Méndez Núñez demands speedy passage of gas tax suspension

Rep. Carlos “Johnny” Méndez Núñez

By John McPhaul

Rep. Carlos “Johnny” Méndez Núñez, the minority leader for the New Progressive Party delegation in the island House of Representatives, demanded on Thursday the approval of House Bill 1223, which would suspend the tax on gasoline and diesel fuel for four months beginning this month.

“This mechanism is a real one that can be done immediately. There is no reason to delay the evaluation of this bill -- none,” Méndez Núñez said. “We seek to help people with real and viable tools like this. We must do it quickly. I request that this bill be attended to urgently during the next few days. It is very important.”

According to a spokeswoman for the House Treasury Committee, Carmen Gómez, the measure is being held up because the committee is awaiting input in the form of “memoranda” from the agencies in charge of the gas tax.

Currently in Puerto Rico, the average cost of a liter of regular gasoline fluctuates between $1.05 and $1.10. Those prices are expected to continue rising due to the uncertainty in the oil market caused by the Russian Federation’s invasion of Ukraine.

The measure amends Section 3020.06 of Law 1-2011, as amended, better known as The Internal Revenue Code for a New Puerto Rico, to make possible the temporary suspension, until June 30, of the aforementioned excise tax.

The former House speaker added that the money to pay for the “immediate” reduction in revenue resulting from a suspension of the gas excise tax, estimated at $44.8 million, would come from excess collections for the current fiscal year of close to $240 million.

The bill establishes a moratorium on the imposition, collection and payment of the excise tax established in subsections (1) and (3) of Section 3020.6, which represents an immediate reduction of 16 cents per gallon of gasoline and 4 cents per gallon of diesel.

“This bill provides instant relief without affecting [tax] collections,” Méndez Núñez said. “We pass along these excesses in collections to the people as it should be. It is a neutral measure, which is paid for with verifiable sources. There should be no problem passing it. None.”

The average monthly fuel consumption in Puerto Rico is 70,000,000 gallons. The impact of the proposed moratorium is a reduction in Treasury collections of $11.2 million per month and $44.8 million for the four months.

“The Department of the Treasury has shown in recent years to be extremely efficient in collecting net revenues in excess of projected amounts,” Méndez Núñez noted. “For the current fiscal year 2021-2022, the Puerto Rico government plans to collect additional revenue of at least $239 million in general funds above the $10.2 billion established by the Financial Oversight and Management Board in its projections. That is why we can pass on these excesses in collections to the people.”

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