By The Star Staff
New Progressive Party Sen. Keren Riquelme Cabrera asked Treasury Secretary Francisco Parés Alicea on Tuesday for a meeting to discuss the proposal presented Feb. 6 for a series of reductions in the tax structure for individuals and corporations.
“We urgently need a direct discussion about the studies that are being conducted in order to analyze in depth the proposals (tax reductions) and the impact they will have on our economic model in the short, medium and long term, as well as the plans that the Treasury Department has for future adjustments in the tax structure,” Riquelme said in a written statement. “It is for these reasons that we are requesting a meeting, as soon as possible, to establish parameters for early evaluation of the proposals, with details and projections associated with their impact on the economy.”
Since reductions in several tax rates were announced at the beginning of February, the senator has been evaluating them, including the proposal to reduce the bureaucracy associated with the filing of financial data through various digital platforms in multiple government agencies; however, in the absence of a draft bill, the concrete analysis could not start, Riquelme said..
“Any reduction in the tax burden on our people and small and medium-sized enterprises (SMEs) is necessary, particularly at this time when the inflation rate for Puerto Rico in 2022 was placed at 6.1 percent, the highest in four decades,” the at-large senator noted. “That said, we wish to continue with the analysis of these and other proposals contained in the presentation you made earlier this month. Given the reality that they have not yet been reflected in a draft bill, then a meeting is recommended.”
Gov. Pedro Pierluisi Urrutia, along with Parés Alicea announced reductions in several tax rates, among which stand out a reduction in the maximum tax rate for individuals from 33% to 30%; maintaining the discounts of 5% and 3% established in Law 257-2018 and Law 40-2020, respectively, for all taxpayers with incomes up to $100,000; and the elimination of the collection requirements to grant the $400 credit to “seniors.”
Changes to the combined structure for corporations were also discussed. A marginal rate of 37.5% is currently established, which consists of a fixed normal contribution rate of 18.5% and a marginal additional contribution rate of up to 19%. That would be reduced, as proposed, by a rate of 17% for businesses with net income up to $275,000. For businesses with revenues from $275,001 to $3 million, a rate of 27% is proposed.
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