By The Star Staff
New Progressive Party (NPP) Rep. Carlos “Johnny” Méndez Nuñez announced over the weekend that his delegation plans to approve in the first semester of 2025 the proposal by NPP gubernatorial candidate Jenniffer González Colón that would eliminate the “inventory tax.”
The tax applies to the value of inventories in the form of finished goods, partially assembled products or raw materials. For years, the business sector has sought its elimination as it increases the cost of doing business. Most municipalities object to the elimination of the tax because it is an important source of revenue.
“This is an issue that I find essential for the economic development of Puerto Rico,” said the NPP minority leader in the island House of Representatives. “For the past two four-year terms, I have been promoting the elimination of the inventory tax, a fixed rate of 9 percent, that harms small and medium-sized merchants and consumers. The effect of this tax is felt in all aspects of the economy and society. That is why we support the proposal of our next governor. We will work from the House of Representatives so that said legislation is approved during the first six months of the new majority.”
Méndez congratulated Bayamón Mayor Ramón Luis Rivera Cruz for also wanting to act on the inventory tax.
Last week, San Juan Mayor Miguel Romero Lugo announced that he will present a municipal ordinance to eliminate the inventory tax for all businesses with sales of up to $500,000 per year.
“We are glad that the mayor of San Juan is in tune with our proposal and that of the next governor to work on the issue of the inventory tax in such a way that it can be eliminated,” Méndez said. “The so-called ‘out of stock’ is quantifiable and has a real effect due to the lack of inventory availability. Before Hurricane Irma [in 2017], the out-of-stock inventory percentage rate was 16; after the hurricanes, it rose to 44 percent. Since the last quarter of 2018, the rate has hovered around 23.6 percent, meaning inventories lack a quarter of their normal capacity to meet the demand of Puerto Rican consumers,” he said.
González Colón proposed the creation of a committee to evaluate measures that, among other things, make the elimination of the inventory tax feasible, classifying it as a “regressive tax” measure.
According to data from the Municipal Revenue Collection Center, the inventory tax generates between $210 million and $230 million annually for municipal coffers.
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