Yesterday, the legislative leadership confirmed that despite the objections of the hotel industry, the Legislature is preparing to approve the tax reform bill with provisions to regulate slot machines next Thursday.
Last week, the Hotel and Tourism Association (PRHTA) warned that legalizing about 30,000 slot machines would cost the Treasury at least $ 149.1 million. The organization based its projection on a study commissioned by the Tourism Company (PRTC).
However, the chairman of the House Treasury Committee, Antonio Soto, said yesterday that the tax reform will include "a language aimed at formalizing and regulating this commercial activity."
By press time, La Fortaleza had not comment on the decision of the legislative majority to include slot machines in the tax reform. But, last week, the Executive branch said it would be addressed in a future bill, outside of the tax reform.
The estimate collections of these slot machines -which the Legislature estimates will be between $ 160 million and $ 180 million- would be distributed in measures to oversee the implementation of the video-lottery. In addition, $ 44 million would be allocated to the General Fund and the rest of the money would go to the Municipal Revenue Collection Center (CRIM, Spanish acronym) and a special fund for police pensions, Soto told El Nuevo Día.
The legislator explained that this fund is to "guarantee" pensions, not to increase them.
"The reform is ready," Soto said, assuring that the Senate and La Fortaleza agree with the changes introduced to the bill. "All the changes that the Legislative Assembly incorporated have been balanced".
Soto said that the Oversight Board has saw the language of the tax reform two weeks ago.
"We have discussed with the Board between 90 percent and 95 percent of the changes," said the representative, explaining that the rest of the changes are "minimal".
In a separate interview, Senate President, Thomas Rivera Schatz, confirmed the inclusion of the slot machines in the tax reform.
"Yes, I am working to get it approved," the senatorial leader said, although he was not so categorical with other matters included in the bill.
"We have consensus on most things. There are some important things in which we have differences, but the impression I have is that we will be able to overcome them. I do not want to make them public," Rivera Schatz said without giving further details.
"There are agreements in the vast majority of things, and that is good news for me," he added.
El Nuevo Día learnt that, in the new version of the bill, contributory reliefs would amount to $ 910 million by 2023. Also, it was known that the content of the tax reform will be discussed - between Monday and Wednesday next week - with the majority caucus, but if its content will be shared with legislative minorities is still unknown.
The bill would go down to a vote on Thursday. However, Soto did not want to confirm these dates.
To questions, Soto indicated that the caps that will be applied to certain tax incentives to identify the $ 150 million needed for the reform to be viable, have already been defined. The Executive branch had proposed cuts of $ 300 million to the Incentives Code, but that proposal will not be addressed in this legislative session.
"The tax changes we have made to the reform benefit all these groups, but we are focusing on individuals. Our contributory model costs less than the model established by the Executive branch," said Soto.
Other changes in the reform include the period in which the elimination of the tax on "business to business" will be implemented. With the amendments, 77 percent of businesses would not have to pay anything if the bill is signed into law and for the other 23 percent it would be gradual, although conditioned to certain financial metrics.
The reduction of the Sales and Use Tax (SUT) on prepared foods, regardless of whether they are paid in cash or by electronic means, is reduced to 7 percent, and would continue to decrease, in a three-year period, until it reaches 1.5 percent if certain collection metrics are met.
Soto had already announced that the changes to the tax reform would favor those who earn between $ 45,000 and $ 120,000. It would also increase, prospectively, from 4 percent to 10 percent the tax rate applicable to personal income generated by investors benefited by laws 20 and 22.
Soto said that they are still trying to identify alternative sources of funding to compensate for the $ 219 million that municipalities would not receive as a result of that tax
Reporter Gloria Ruiz Kuilan collaborated with this story.
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