Yesterday, the secretary of Treasury, Raul Maldonado, gave governor Ricardo Rosselló Nevares a draft of the project of tax reform that, if no changes required, would be presented to the Legislature as soon as next week.
The tax reform that this Administration will submit seeks to boost the economy, simplify the tax system and ensure that tax money reaches the Treasury through an effective audit, was disclosed by La Fortaleza yesterday.
"We have some drafts that we are presenting to the governor for evaluation. He will now evaluate them with his fiscal advisors team, and we expect to have his suggestions to make the necessary changes and submit the final version next week,” said Maldonado, after meeting the governor and his fiscal advisors team at La Fortaleza.
"This is a process where the governor is going to see all the information we have given and his advisors will review it," Maldonado explained. He indicated that the reform the governor will propose is based on "simplifying the processes, both for taxpayers and the Government."
The secretary of Public Affairs of La Fortaleza, Ramón Rosario Cortés, explained that the governor is seeking a tax reform based on three pillars. "The first one is to boost the economy. Job creation is the main goal. The second pillar is to have a simpler tax system. The World Economic Forum has pointed out that our contributory system is very complicated, and that makes Puerto Rico a jurisdiction, which is not competitive to attract investment. And the third one is a tax system that can be fiscalized and that taxes paid by the citizens flow into the state coffers," declared Rosario Cortés.
La Fortaleza anticipates that the tax reform will reach the Legislature next week. By that time, and if it is approved by the Oversight Board (OB), the budget bill for 2017-18 should be ready.
"We are still working with the consultants of the Oversight Board to clarify some points that require additional information. We expect this process to be completed during next week. The date of filing is defined by the governor once the Oversight Board validates it. First, we have to wait first for the validation of the Board,” he stated.
"The expectation is that between this and next week we will finish that evaluation with the Oversight Board. We would have to pass through the sieve of the Board first," he remarked.
On Monday May 22nd the period the Board has to analyze the draft of the budget expires. "There are doubts because we have to show the measures (of income generation and savings) in terms of implementation and what they are going to produce. It's 'show me how," explained the government's representative to the OB, Elías Sánchez Sifonte.
Meanwhile, Maldonado commented that OB consultants monitor "on daily basis" the flow of government money into the Treasury.
According to the conditions established by the OB when approving the fiscal plan last March, if the government does not achieve a reserve of $ 200 millions by June 30th, a reduction of working days for state employees and the elimination of the Christmas bonus will automatically take effect on July 1st.
"Today the reserve is of $ 170 million. I have to certify that on June 30th, but as we are obviously going to have it (the money) before that date, we will certify it before,” revealed Maldonado.
If the government complies with the requirements of the OB, they will have to re-do the exercise on September 1st. By then, the government must again test its capacity to avoid reducing working days and the elimination of the Christmas bonus if savings are kept by $ 293 million in Treasury.
"We are in that projection, but that is measured day by day," concluded the secretary of the Treasury.
"We are very confident that we will have complied with all the commitments by June 30th," he assured.
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