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  • Writer's pictureThe San Juan Daily Star

PDP lawmakers announce conditions for approving tax reform

The island House of Representatives reaffirmed its commitment to transparency and citizen participation, ensuring that tax reform proposals are analyzed and debated openly.

By The Star Staff

The island House of Representatives announced Sunday that it is ready to pass a new version of tax reform if Gov. Pedro Pierluisi Urrutia agrees to conditions established by the Popular Democratic Party majority, while revealing the points the majority considers should be evaluated.

Treasury Committee Chairman Jesús Santa Rodríguez, Municipal Affairs Committee Chairman Juan José Santiago Nieves and House Speaker Rafael “Tatito” Hernández Montañez made the announcement Sunday.

“The Treasury Committee is committed to addressing the Tax Reform immediately and effectively,” Santa Rodríguez said in a written statement. “We will use the previously approved bill to move forward with resolving concerns and carry out this crucial reform for Puerto Rico.”

The points that the majority lawmakers seek are:

* Tax rate adjustment: A restructuring of the tax rates for individuals and corporations to create a fairer and more competitive system.

* Stimulus for small business: The reform seeks to reduce the tax burden of small and midsize companies, thus promoting investment and employment.

* Incentives for innovation: Tax incentives are being proposed for companies that invest in research and development, promoting innovation and competitiveness.

* Administrative simplification: The tax reform focuses on simplifying administrative and tax filing processes, easing the burden for taxpayers and improving efficiency. In turn, it seeks to convert the tax application SURI as the unified platform for collecting all contributions, centralizing the collection of all income in one place. In addition, terms such as internal revenue mechanisms are to be simplified and standardized.

* Support for sustainability: Incentives are being proposed for companies that adopt sustainable and environmentally friendly practices, contributing to a greener Puerto Rico. Likewise, the reform bill seeks to evaluate establishing a tax credit for those who install solar panels in their home or business.

* Promotion of employment: The reform seeks to stimulate job creation through tax benefits for companies that create job opportunities and employee benefits.

* Adjustment in the tax on automobiles: Lawmakers will evaluate an adjustment or modification of the tax on automobiles.

* Support for education: Tax deductions are considered for companies that invest in employee educational and training programs, promoting training and development.

* Integrated municipal contributions: The tax reform must integrate the collection of the municipal sales and use tax (IVU by its Spanish acronym) into the SURI system, simplifying the processes for taxpayers. Likewise, it should integrate the “patente” declaration and the personal property tax into the income tax return. In addition, the reform must freeze the inventory tax to encourage the supply of inventory by businesses.

* Increase in benefits for vulnerable groups: The increase in credits and tax benefits for low-income pensioners and the elderly must be included, strengthening social protection.

“Unifying the filing of forms and reports on state and municipal contributions is beneficial to all,” Santiago Nieves said. “It reduces taxpayer bureaucracy, lowers business costs, and allows for more effective examination. In addition, freezing the inventory tax will increase the production, storage and importation of goods while positively impacting municipal finances.”

Hernández Montañez, meanwhile, stated that “this Tax Reform is a sign of our commitment to Puerto Rico.”

“We are working hard to create a fair system that fosters economic growth and benefits all citizens,” he said. “The House of Representatives is ready to create a more efficient, equitable, and competitive tax system for Puerto Rico.”

The House of Representatives reaffirmed its commitment to transparency and citizen participation, ensuring that the proposals are analyzed and debated openly.

Earlier this year, Pierluisi presented his proposed tax reform, which sought, among other things, to eliminate the inventory tax and reduce tax rates.

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