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  • Writer's pictureThe San Juan Daily Star

NPP House leader blasts PDP tax reform proposal

By The Star Staff

Like so much “legislative nonsense that penalizes the people” is is how the New Progressive Party (NPP) minority leader in the island House of Representatives, Carlos “Johnny” Méndez Nuñez, described the Popular Democratic Party’s (PDP) replacement for House Bill 1839, the so-called tax reform, on Tuesday.

“It is painful to know that the Popular Party in its effort not to lower people’s taxes, has created legislative nonsense that is not viable at all and that, moreover, is designed to penalize the people,” Méndez Nuñez said. “The NPP delegation in the House rejects the changes introduced by that group to House Bill 1839 and we reiterate that the PDP is the biggest obstacle that the people and our small and midsize businesses have to receiving a reduction in taxes.”

“The PDP removed the language eliminating the sales and use tax [IVU by its Spanish acronym] at the docks, thus refusing to lower the tax burden on individuals,” the former House speaker pointed out. “Meanwhile, they don’t want to do anything to mitigate the inflation-driven increase in the cost of living. On the contrary, the amendments they introduced make it virtually impossible to lower taxes to match cost-of-living hikes. First of all, they force the Treasury Department to go to the Legislature every year to ask for ‘permission’ to match benefits with increases in the cost of living, something highly bureaucratic and unrealistic.”

Méndez Nuñez said that among other amendments that do not have the endorsement of the NPP are the elimination of the option for bona fide farmers to take advantage of a tax decree. The replacement bill also empowers lawyers to certify Alternate Basic Contribution expenses, without requiring them to have academic preparation in accounting.

Another highly questionable aspect of the bill, Méndez Nuñez said, is the creation of a “distinction” in the tax paid for cocktails made with rum in relation to drinks made with other types of alcohol.

The bill also amends the language for beneficiaries of passive income exemptions to impose a fixed period of residence of 15 years before enjoying those benefits. That prevents Puerto Ricans who move back to the island from enjoying the benefits, Méndez Nuñez said.

“Another example of the PDP’s tax punishment of people,” he said. “If a Puerto Rican, for example, who moved to Florida due to Hurricane Maria, decides to return to his homeland, he will not be able to take advantage of the tax benefits of the passive income exemptions before he lives here for 15 more years. That kills the concept of ‘We are all Law 22,’ because it penalizes our people again.”

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