CPAs support tax reform bill for introducing ‘significant changes’
Puerto Rico’s School of Certified Public Accountants expressed its support of House Bill 1544, which proposes a new Tax Code for the island, saying it introduces “a number of significant changes in the rate of income tax for both individuals and corporations.”
During a public hearing held by the House Committee on Finance, Budget and Supervision, Administration and Puerto Rico Economic Stability, PROMESA, the President of the CPA trade group, Ramón Ponte, also said the bill proposes other specific changes to facilitate administrative strategies to improve oversight and compliance with the Code, which in turn should provide the necessary income so that it is neutral to the government’s revenue collections.”
Ponte also favored incorporating tax rate reductions for individuals, as it achieves a redistribution of the tax burden and encourages production.
He also concurred with the establishment of a Work Credit “as a useful mechanism to counter the regressive effect of consumption taxes, such as sales and use tax, on Puerto Rico’s working class.”
On that point, Ponte recommended that the language be amended in that section of the bill so that the credit can be adjusted by an inflation factor, to prevent the provision from losing validity with time.
Similarly, he backed changes in the sales and use tax, specifically related to the business-to-business tax and a special rate on prepared foods, as long as electronic payment methods are used.
In response to questions from Committee Chair Antonio Soto, Ponte also favored that the New Tax Model present additional tools to stimulate the economy.
“In the manner in which you can reach a balance where we can offer more relief, within the limitations we have, I believe it would be favorable for the economy,” Ponte said.
For his part, Mr. Cirilo Cruz, representing the Retail Trade Association (known as ACDET for its initials in Spanish) generally supported the measure, while recommending including the elimination of the inventory tax in the discussion.