Puerto Rico holds 2nd-highest corporate tax rate worldwide, CUD president says

Ramón Barquín, president of the United Retailers Center

By THE STAR STAFF

Ramón Barquín, president of the United Retailers Center (CUD by its initials in Spanish), warned Sunday that Puerto Rico has become one of the least competitive jurisdictions for business taxation globally, urging immediate reforms to foster investment and support small and midsize enterprises (SMEs).

According to the report “Corporate Tax Rates Around the World, 2025” by the Tax Foundation, Puerto Rico’s statutory corporate tax rate stands at 37.5%, second only to Comoros in Africa at 50%. That places the U.S. territory far above major European and Latin American economies and well beyond the global average of 23.6% for 2025.

Barquín emphasized that while most countries have reduced or maintained reasonable tax rates to attract foreign investment, Puerto Rico’s high tax burden is stifling economic growth. He called on the government to commit to lowering business taxes by 2026 and outlined a strategic agenda aimed at stabilizing SMEs amid rising operational costs.

Among his priorities is the elimination of the inventory tax, which Barquín described as a “regressive burden” that limits economic development. Although legislation passed in October of this year froze the tax, the CUD continues to work with the government to find permanent alternatives. Barquín renewed his call for the definitive elimination of the tax by 2026, labeling it a key step toward improving competitiveness and supporting local commerce.

Barquín also proposed reforms to Law 60, the Incentives Code, to include local investment requirements and create a tiered tax system that ensures fiscal benefits extend beyond large foreign investors and stimulate real local economic activity.

The CUD president’s agenda, presented this month, also calls for stability in energy costs and direct tax relief for small retailers to offset operational challenges. He urged the government to streamline bureaucracy to reduce compliance costs and advocated for measures to curb excessive electronic transaction fees, protecting profit margins for SMEs.

Energy diversification is another key component of Barquín’s strategy. He suggested exploring nuclear energy as a long-term solution to reduce electricity costs and encouraged businesses to take advantage of federal renewable energy incentives before they expire in 2026. At the same time, he maintained a critical stance on LUMA Energy’s performance, citing outages and rising costs that directly affect retailers.