Entrepreneurs launch guide to educate on Act 60
A group of entrepreneurs who have established their businesses under the provisions of Act 60 launched a new multimedia initiative to educate potential investors and the public about the provisions of the tax incentives law, in simple terms.
The private sector campaign aims to support the government’s efforts to promote Act 60 incentives, which are led by the Department of Economic Development and Commerce (DDEC, in Spanish) and Invest Puerto Rico.
The group’s goal is to explain the benefits of the sometimes-complex provisions of the law with a new set of tools that make information on Act 60 more widely and readily available, simple to understand, to enable access of its eligibility and benefits to all interested individuals and companies.
The effort includes a new website, a Facebook page and educational materials in English and Spanish.
Topics covered include general purpose incentives, as well as specific incentives for individuals, for export of goods and services; for finance, investment, and insurance; the visitor’s economy; manufacturing; infrastructure and renewable energy; agribusiness, creative industries, entrepreneurship and more.
“Despite the overwhelmingly positive economic and fiscal impact of Act 60 incentives as evidenced by official data published by government agencies themselves, there remains vast untapped potential to maximize their economic development benefit,” the group stated.
“The assumption by some that the covered economic activity would be carried out in Puerto Rico anyway, even in the absence of Act 60 incentives, is misconstrued and incorrect,” the group said, citing DDEC documents.
Investments by individuals designated as resident investors under Act 60 in real estate and businesses on the island are presently estimated at more than $4 billion and growing, according to a report prepared by economic research firm Estudios Técnicos and commissioned by the DDEC in 2019. Planned capital investments were estimated at $678 million and the number of direct jobs created at over 4,400.
From 2015 through 2021, businesses benefitting from incentives for exporting companies under Act 60 have made estimated tax payments totaling over $500 million to the Puerto Rico Treasury Department the group stated.
Resident investors have also generated substantial fiscal income to the government of Puerto Ric including an estimated $26 million in Sales and Use Tax tax gain resulting from paid wages to employees and an estimated SUT tax gain of almost $40 million (approximately $34.5 million to the central government and $5.2 to municipalities) resulting from more than $700 million in local consumption activity from grantees between 2015 and mid-2019.
These individuals also paid approximately $8.8 million in property taxes resulting from real estate investments from grantees between 2015 and mid-2019, the group stated.
Enacted in 2019, Act 60 was created with the intent of consolidating all previously existing tax benefit laws into a single code, eliminating all incentives deemed obsolete or with little or no real and effective contribution to Puerto Rico’s economy. Prior to Act 60, there were approximately 76 different laws and programs created between 1945 and 2019 that comprised the legal framework of Puerto Rico’s economic incentives.
