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Senate approves creation of sales tax-free zones in San Juan

The Puerto Rico Senate approved Senate Bill 1263 that would establish the “Sales and Use tax-free zones in the capital city of San Juan,” authored by Sen. Miguel Romero.

The measure seeks to authorize the municipality to designate areas where, for a minimum initial term of three years to a maximum initial term of five years, small and medium enterprises would be exempt from paying the 11.5% Sales and Use tax (known as the IVU, for its initials in Spanish.)

“Today the Senate takes a step forward to improve the municipality’s economic situation,” Romero said.

“I thank our President Thomas Rivera-Schatz, Henry Neumann, and other colleagues who voted in favor of the legislative measure,” he said. “We’re establishing an additional tool to address depopulation and lack of economic activity affecting important sectors of San Juan, such as the Paseo de Diego in Río Piedras.”

The measure now goes to the Puerto Rico House of Representatives for evaluation.

“I trust the House will assess the measure with the responsibility that characterizes them to bring welfare to depressed areas in San Juan,” he said. “Although it’s true that the government would not receive a minimal amount of additional funds from the 11.5% IVU, it would be benefiting from income that it would otherwise not get.”

Vacant, deteriorating and ineffective commercial spaces do not pay municipal licenses, construction, excise or income taxes, he said.

“They also don’t pay for services such as electricity and drinking water, do not employ people who would be filing income tax returns, don’t pay licenses and other permits and other money that has failed to enter the government’s coffers under the present circumstances,” Romero said.

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This story was written by our staff based on a press release.

1 Comment

  1. Richard Tryon May 7, 2019

    How about expanding this freedom to our farm in Santa Isabel. No power for 11 months and no crop for two years. No body in house with holes in roof for a year. We can provide jobs and make products without tax, but Ag Dept gives no Bonafide until restoration leads to strong evidence of sales of ag products. Chicken and Egg problem!


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