The U.S. Treasury has submitted a report with recommendations to transform Puerto Rico’s property tax system, including the potential elimination of the controversial inventory tax, Raúl Maldonado, the local administration’s CFO said.
Maldonado, who is also Puerto Rico Treasury Secretary, shared the content of the report with members of the United Retailers Association, the School of Certified Public Accountants and the Puerto Rico Chamber of Commerce to get their input. The presentation will also be shared with mayors, he said.
“We were assigned two consultants, specialists in tax issues to offer a series of recommendations aimed at improving the property tax system,” Maldonado said.
“The government will evaluate it, as well as mayors and the private sector with the goal of eliminating a tax that is harmful to Puerto Rico, while benefiting all parties,” Maldonado said.
Meanwhile, CPA trade group President Cecilia Colón said “we appreciate the opportunity to listen to the recommendations of the federal government’s consultants on the transformation of the property tax system, something that the CPAs have insisted it needs to be restructured as part of an integrated tax reform. We will be analyzing the details of these recommendations and provide our comments.”
Chamber of Commerce President Kenneth Rivera said conceptually, the report is acceptable
“We have not seen the full document yet, but we believe it is aimed in the right direction. To the extent that we believe it can be beneficial for local entrepreneurs, that it eliminates the inventory tax and focuses on imposing taxes on real property, it seems reasonable,” Rivera said.
The elimination of the inventory tax has been under discussion for the better part of the last 18 months, during which retailers have insisted that without the tax, they would be able to increase inventories on the island to avoid food shortages in case of natural disasters such as Hurricane María.