The private-sector delegation headed by the Puerto Rico Manufacturers Association that lobbied in Washington, D.C. last week in favor of the Puerto Rico Investment Promotion Act, asked members of Congress for a public hearing to discuss the effects of the proposal that seeks to jump-start the island’s economy.
If the House Ways and Means Committee — in charge of analyzing the proposal — agrees to the request, “it would be an unprecedented event and would give us a chance to present our specific situation before Congress,” said PRMA President Pedro Watlington during a meeting with members of the media Wednesday.
During the trip, representatives of the PRMA, the Puerto Rico Chamber of Commerce, the Pharmaceutical Industry Association of Puerto Rico and the Bankers Association met with 23 members of Congress to discuss the details contained in H.R. 2030, which outlines the Act known as PRIPA.
The bill submitted late last year pursues the creation of Section 933A that would authorize — but not require — Puerto Rico corporations that earn at least 50 percent of their income on the island to elect to become domestic U.S. companies. In doing so, the companies would essentially receive the same federal tax treatment that Puerto Rico individuals receive under current law.
The proposal has received bi-partisan support as well as backing from the island’s public, private and labor groups, who agree it is a way to incentivize investment in the island and create jobs.
“At least half of them were completely unaware of our situation and we had the chance to explain to them the problems Puerto Rico has and the details of the bill so that when they ultimately see it, they know what it represents,” Watlington said.
Still, the lawmakers made it clear that it is unlikely that Congress will make any tax reform decisions or changes before the November elections.
“They recommended that we continue this lobbying effort so that it is effective, when the time comes,” he said. “Some legislators told us they are not currently co-sponsoring any bills that have to do with taxes until a broad tax reform takes place.”
That said, Jorge Cañellas, who represented PIA and the Bankers Association, noted that it is vital for Puerto Rico to “find a way to insert itself in the tax reform so that companies operating here don’t have to pay an additional tax at the U.S. level.”
“We have not benefitted from a tax incentives such as this for 15 years, so the idea of presenting Puerto Rico as a North American territory, where jobs created remain U.S. jobs, gives the proposal a better chance to succeed,” he noted.
The local lobbying movement has gained support outside Congress as well, from national trade organizations such as the National Association of Manufacturers and the U.S. Chamber of Commerce.
Puerto Rico Chamber of Commerce Executive Vice President Edgardo Bigas said Wednesday the stateside trade group is “strongly affiliated with the Republican Party, so their support is important in getting the bill approved in the House.”
The stateside CofC is expected to issue a letter expressing its backing of H.R. 2030 within two weeks, Bigas said.