Dozens of key Hispanic business leaders from New York, New Jersey and Puerto Rico gathered in New York this week for the first “Puerto Rican & Hispanic Business Summit” to discuss common business opportunities and challenges.
During the gathering, participants — including the New York State Coalition of Hispanic Chamber of Commerce, businessman Ignacio Velóz and numerous business leaders from the island — expressed the need for transparency and a “clear commitment from the leadership in the House of Representatives Ways and Means Committee of the U.S. Congress, in Washington, D.C., to treat Puerto Rico companies fairly in the on-going tax reform discussion.”
During the meeting, participants argued that if manufacturing companies operating in Puerto Rico are treated as typical “foreign companies” for federal tax purposes, without considering the fact that the island is part of the United States, thousands residents stand to lose their employment.
“This would have catastrophic consequences for Puerto Rico and the United States, as it would cause massive job losses, business closures in favor of establishing the same in other countries and huge waves of Puerto Ricans relocating the U.S. mainland,” they said.
“This is by far the most important economic development issue affecting the future and sustainability of the Puerto Rican economy, which in turn impacts the lives of millions here in the U.S. This is huge,” said Velóz, President of In Service Inc.
“All Puerto Rico companies and its citizens are not foreign entities. These Puerto Rico companies need be treated fairly, or else thousands of American jobs on the osland would be lost forever,” he said.
If U.S. Controlled Foreign Companies (mainly manufacturing multinationals) operating in Puerto Rico are taxed identically as other U.S. companies that operate in other countries around the world, where only “foreign” citizens are employed, Puerto Rico would suffer irreparable harm, he said.
“Puerto Ricans are U.S. citizens, not ‘foreign’ citizens. Puerto Rico’s economy could stand to lose 50 percent of its output, if Congress does not do what is right,” Velóz noted.
Manufacturing represents half of Puerto Rico’s GDP, or approximately $50 billion in economic activity.
“This generates approximately 80,000 direct jobs on the island and 320,000 indirect jobs for every existing direct job, three additional indirect jobs are also generated in Puerto Rico and one in the [U.S. mainland,]” said Puerto Rico Manufacturing Association President Carlos Rivera, who also participated in the summit.
“Each of our jobs belong to the U.S. citizens,” he added.