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  • Writer's pictureThe San Juan Daily Star

NPP House caucus endorses tax reform proposal

Rep. Carlos “Johnny” Méndez Nuñez


The New Progressive Party (NPP) caucus in the island House of Representatives met Monday to endorse the proposal of its minority leader, Rep. Carlos “Johnny” Méndez Nuñez, to promote tax reform.

The NPP delegation also endorsed expediting the approval of House Bill (HB) 1576, which enables an incentive payment to all individual taxpayers for adjustment in the cost of living for this year.

“After six years of cuts implemented by the Financial Oversight and Management Board, of having reorganized the government’s finances, an effort that began in January 2017, today we are in the position of being able to provide real tax relief to the people,” Méndez Nuñez said. “Today we can do justice to taxpayers who suffered extraordinary tax increases under the Popular Democratic Party (PDP) administration during the four-year period from 2013 to 2016. The NPP delegation in the House is committed to a tax reform this year.”

Méndez Nuñez noted that 11 years have passed since the last time a tax reform was implemented.

“While the reform is being worked on, it is important to approve, as soon as possible, HB 1576, a measure that amends the Internal Revenue Code of Puerto Rico to include, for the first time in modern history, tax adjustments to alleviate the increase in the cost of living in the face of the unprecedented inflation rate of over 10.5% in the case of many products,” the NPP minority leader added.

In the past four years, the NPP delegation in the House led the effort to eliminate the tax on the provision of services rendered to other merchants and designated professional services, better known as B2B, as well as a series of reductions to several contributory lines, through Law 40-2020.

The statements of the former House speaker were endorsed by the other members of the pro-statehood party caucus.

“Puerto Rico’s tax system has changed a lot over the past decade. For the first time in modern government history, the resources exist to provide great relief to working people, mothers who are heads of households, and to our small and medium-sized merchants,” Méndez Nuñez said. “The time has come and we are ready to work on a comprehensive tax reform, which includes, in addition to reducing rates, the simplification of the system that results in less administrative costs and greater oversight.”

“The [tax] reform has to take place,” he continued. “We have to put more money in the hands of the people. Not only do we support this concept, we are ready to work on it as soon as possible. The money to pay for this reform is in cash. In September, the Treasury Department raised about $981 million, up 7.7 percent from a year earlier. In fact, revenues for 2022 [through September] exceeded projections by a historic figure [17.7 percent].”

“Our priority as a delegation is to help people, so that everyone has the opportunity to benefit from the fiscal responsibility that we have implemented since 2017 and that has allowed unprecedented collections in the history of the island,” Méndez Nuñez said.

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