The president of the House of Representatives, Carlos “Johnny” Méndez, announced today, Monday, that in the legislative session this Thursday They will pass a bill that temporarily eliminates the inventory tax.
The measure, however, does not contemplate any mechanism to substitute the $ 220 million annually that the municipalities would no longer receive by way of arbitration.
“The project will establish a moratorium on the inventory tax until the state of emergency that the governor has presented is lifted, specifically to be able to attend to this crisis situation”, Méndez indicated when pointing out that the initiative was “seen with good eyes” by the Chamber of Commerce and the United Center of Retailers.
Méndez did not rule out that the exemption could be extended. He argued that the President of the United States, Donald Trump, did not rule out a federal government shutdown and warned that the crisis created by the coronavirus could lead to a recession. Added to this panorama is the proximity of the hurricane season that begins in June.
“The big problem is that we do not have enough inventory in stock for the needs of the Puerto Rican people and we are looking to start the hurricane season again. We have to prepare for a season that perhaps exceeds March 30. We have to be farsighted and we cannot put on straitjackets ”, he pointed.
When asked by this media about whether the measure contemplated any remedy to compensate for the loss in income from the inventory that it would represent for the municipalities, Méndez said that, as other government components have done, mayors have to learn to do more with less .
“We (the Chamber) have received a cut in more than 50% of the budget that we had in 2016 … and what the people demand is that we think and put Puerto Rico first to the particular interests of a municipal government that has money , but he has not known how to use it ”, he replied.
Since 2017, the House of Representatives has before its consideration a bill that considers the elimination of arbitration, but the lack of consensus among the affected sectors, including mayors, has prevented its approval.
“We have had multiple conversations with municipal governments (as part of the discussion of the measure), and my position is that I am not going to approve new taxes and that we have to look for alternatives within the amalgam of government revenues where it can be supplied that amount that is around $ 220 million, “he said,
Various groups that endorse the elimination of the inventory tax have said that the tax – which is around 9% – limits the store of essential items, which – during periods of emergency such as Hurricane Maria – leads to a lack of products essentials, like food.