The Puerto Rico Chamber of Commerce (PRCC) is holding an event it’s calling “the First PROMESA Conference” today in San Juan. With the support of El Nuevo Dia, Birling Capital Advisors, and the Select Global Advisory Group, the PRCC is bringing its members a “walk through” of PROMESA and its own recommendations to the Task Force on Economic Growth.
Caribbean Business reports that PRCC is not in favor of a tax incentive proposal some other business groups have favored. The Puerto Rico government, the Private Sector Coalition and the Manufacturers’ Association are asking the Task Force to consider incentives that exempt 85% of Island-sourced dividend income from federal income tax and tax the remaining 15% half of the federal corporate income tax rate. Caribbean Business reported earlier that “the key principles of the proposal are aimed at ensuring that it is not tainted with the corporate welfare stigma of Section 936 and providing for mandatory repatriation of trapped Puerto Rico source income and including strong base erosion rules.”
The reference is to Section 936, a tax code which benefited corporations without producing sustainable growth in Puerto Rico’s economy.
The PRCC points out that these measures may not be relevant if Puerto Rico becomes a state. They want to see proposals that will work in the future regardless of the status Puerto Rico’s voters choose.
The Private Sector Coalition includes more than 20 organizations, including the PRCC as well as the Manufacturers Association, the Puerto Rico Products Association, the Puerto Rico Restaurant Association and the Puerto Rico Hospital Association.
Chamber of Commerce President David Rodríguez listed some of the proposals the PRCC will send to the Task Force:
- Equality in healthcare funding, which is also favored by the U.S. administration
- A repeal of taxes on healthcare premiums
- Extension of the Earned Income Tax Credit, a tax credit for working families, to Puerto Rico
- A temporary reduction in payroll taxes for Puerto Rico
- Intervention by the Federal Energy Regulatory Commission to help PREPA, the Island’s electric utility
“If the business environment is improved,” Rodríguez said, “there will be more revenues to support essential services and pay pensions.”