Mayors, CRIM partner to seek alternatives to inventory tax

By THE STAR STAFF

Following a high-level meeting between the Puerto Rico Mayors Federation and the Legislative Assembly, Federation President Gabriel Hernández Rodríguez announced the formation of a working committee tasked with developing proposals to replace Puerto Rico’s inventory tax.

The freezing of the tax, which is set to be phased out over a three-year period, has raised concerns among municipal leaders from both of the island’s major political parties due to its potential impact on local government finances.

The Mayors Federation groups mayors from the New Progressive Party (NPP).

The committee will begin meeting next week to evaluate alternatives and present recommendations to the Legislature. Among those appointed is Jesús Colón Berlingeri, mayor of Orocovis and chairman of the Municipal Revenue Collections Center (CRIM by its acronym in Spanish) governing board, who will lead efforts related to the entity.

“We met with the [leaders] of the House and Senate, along with members of the Federation and the CRIM governing board,” Colón Berlingeri said. “We expressed our concerns about the elimination of the inventory tax, particularly regarding the funds used to pay off municipal debt and the resources needed to continue serving our communities.”

He emphasized that both legislative leaders committed themselves to reaching an agreement before the three-year phase-out period ends.

“Their commitment was firm,” Colón Berlingeri said. “We trust their word and hope it will be honored.”

The Federation’s working group includes the mayors of San Juan, San Lorenzo, San Germán, Vega Alta and Camuy, who will focus on drafting proposals to replace the tax. CRIM will also form a technical team composed of the NPP mayors of Bayamón, Naranjito and Orocovis, and the Popular Democratic Party mayor of Coamo, Juan Carlos García Padilla, to evaluate viable fiscal alternatives.

One such alternative under consideration is restructuring the tax to be paid at the point of sale, based on average annual sales. CRIM is currently modeling this approach to assess its potential for revenue generation.

The outcome of the discussions and proposals is expected to be critical in shaping the future of municipal funding across Puerto Rico.