By The Star Staff
Municipal Revenue Collection Center Executive Director Reinaldo Paniagua Látimer insisted Tuesday on economic alternatives to avoid a fiscal crisis in municipalities in January.
Paniagua Látimer said that although he does not object to the proposed five-year freeze on the inventory tax, a key source of revenue for Puerto Rico’s municipalities, the government must seek solutions to avoid an economic debacle in the towns.
The tax applies to the value of inventories in the form of finished goods, partially assembled products or raw materials. For years, the business sector has sought its elimination as it increases business costs. Most municipalities object to its elimination because it is an important source of revenue.
“There are many things that need to be addressed now. [Officials] will address the inventory tax bill, and it will be frozen for five years. I think it is right that justice be done for the commerce sector, which is asking for prudence to promote economic development,” Paniagua Látimer said. “Having said that, it is no less true that we have to be careful that our first line of defense, which are our municipalities, which are there serving the citizens, do not fall into serious, precarious economic conditions.”
“But it is imperative that in that term in which a committee will be appointed to address this matter, we can agree on how this loss of funds will be assimilated, and we do not have many places to look; that is, we have to see the alternatives that we have,” the official added.
New Progressive Party (NPP) Rep. Carlos “Johnny” Méndez Nuñez recently announced that in the first semester of 2025 his delegation will approve the proposal of governor-elect Jenniffer González Colón, which would eliminate the inventory tax.
More than half of the towns on the island are facing a fiscal crisis and many are expected to become insolvent next year.
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