Washington - Although expectations are still low, the leadership of the Puerto Rico Chamber of Commerce requested this week in the US Senate for Congress to reconsider the treatment for foreign companies on the island in that the federal tax reform.
The president of the Chamber of Commerce, Kenneth Rivera, and part of its leadership met, between Monday and Tuesday, with advisers to American senators, amid a trip aimed at strengthening relations with organizations such as the United States Chamber of Commerce, the Cato Institute and the American Bar Association (ABA).
Both the US Chamber of Commerce and the Cato Institute, libertarian study group, as well as the ABA agree to support the Puerto Rico waiver from federal Cabotage Laws.
The meetings were aimed at laying the foundations around issues that they hope to address more strongly in 2019, when next Congress session begins. Both the Senate and the House are in legislative recess until mid-November.
Conversations with advisers to senators Roger Wicker, a Republican for Mississippi; Robert Menéndez, a Democrat for New Jersey; and Bill Nelson, a Democrat from Florida, were aimed at putting pressure in favor of the Controlled Foreign Corporations (CFCs) having, at least, a lower rate in Puerto Rico than in the other foreign jurisdictions."
Both Menéndez and Nelson are on record supporting any initiative that allows CFC companies in Puerto Rico to have preferential treatment regarding the new 10.5 percent tax on their intangible products.
The federal House approved some measures known as "Tax Reform 2.0", but that mainly seeks to make permanent those cuts approved in 2017 in the tax rates for individuals. But those bills do not have a clear path in the Senate.
Hopes for this legislation to include some language to improve the treatment of CFCs in Puerto Rico are almost nil. "I do not see any of this being resolved by the end of the year," Rivera said on Monday, accompanied by the Chamber of Commerce's executive director, Miguel Vargas, and Wanda Pérez, Legislative Affairs Director.
Chief of Staff Raul Maldonado indicated that achieving favorable treatment this year for the CFCs would depend on getting a beneficial language for the island in the regulation of the federal tax reform.
As president of the Chamber of Commerce, Rivera thinks that it should be studied how to give permanence and certainty to the revenues left by the 4 precent tax on CFCs sales, and whose federal credit continues to depend on a temporary determination of the Internal Revenue Service (IRS).
"Its an issue that must be analyzed, but we must be cautious" so that it does not generate new uncertainties among companies, Rivera said, regarding the tax that generates annual revenues of about $ 1.8 billion.
In meetings with the US Chamber of Commerce and the Cato Institute, members of the Puerto Rico Chamber of Commerce also promoted issues such as their rejection of Governor Ricardo Rosselló´s executive order that would raise the salary of construction workers to $ 15 per hour, when they are hired for projects related to the federal funds aimed at mitigating the damage caused by Hurricane María.
"We still hope that the governor will reconsider and that order will be adjusted to the needs of Puerto Rico," Rivera said.
According to Rivera, possibilities of taking advantage of the "Opportunity Zones" program; promoting Jennifer González -Resident Commissioner in Washington- bill on investment in "economically distressed areas" and the possible privatization of the State Insurance Fund were other issues sought to be discussed in some of their meetings.
💬See 0 comments