The government is defending in court its decision to publish the list of beneficiaries of Laws 20 and 22

The non-profit organization Espacios Abiertos (EA) intervened in court in support of the Department of Economic Development and Commerce (DDEC) position to publish the list of beneficiaries of decrees under Laws 20 and 22. a lawsuit from the Puerto Rico Privacy Association, Inc. (PRPA), alleging that such an act violates the privacy of its members, a group of unidentified investors.

The Department of Justice, representing the defendants – the DDEC and the Department of the Treasury – indicated at the hearing yesterday afternoon by Judge Anthony Cuevas Ramos of the Extraordinary Appeals Chamber of the San Juan Court that the publication of the information relating to the tax decisions granted are done in accordance with the mandate of Law 60 of 2019 (known as the new Puerto Rico Incentive Code). He stressed that, contrary to what the plaintiffs claim, the information published is not confidential, personal or financial.

Three lawyers from the firm of Block Legal, representatives of PRPA, for their part, opposed the dismissal, insisting that the publication of the information violates the privacy of those receiving the decrees and undermines their contractual relationship with the government.

Open Spaces questioned the active legitimacy of the association that filed the lawsuit, while at the same time joining the arguments of the DDEC in favor of the dismissal.

Since 2017, Open Spaces has advocated for the disclosure in Puerto Rico of information related to tax benefits, as has been done in the United States and many other countries around the world since the 1970s, said Cecille Blondet, CEO of EA.

“Our people must have access to the uses that are spent on every cent of public money, including knowing who is receiving it and under what title. This applies in the same way to tax breaks. The money that goes out of the treasury for these concessions is also a public expense, for which both the government and those who receive these concessions must be held accountable, ”Blondet explained in a press release.

“Without clear and accurate information, we cannot assess the return on investment of these concessions and verify whether the desired social benefit has been achieved. In times of crisis, where austerity measures are imposed and services to the population are reduced, the country cannot blindly pursue fiscal and budgetary issues. Every dollar counts and knowing is our right, ”he emphasized.

Tax or tax expenditures include any tax exclusions, deductions, exemptions, and credits that the government gives to different types of taxpayers: individuals, companies, industries, and non-profit institutions. In general, these concessions are allowed by law to encourage economic activity or achieve social impact. Tax breaks are classified as government expenditures under the tax law, and like all government expenditures, such information must be available to the public.

“The announcement by the Treasury and the DDEC is recent and historic. A step forward towards greater transparency, something that must be recognized and protected, ”says Blondet. He noted that there are platforms, such as the Good Jobs First “Subsidy tracker,” that collect and make easily accessible the information released by the various jurisdictions in the United States.

In Puerto Rico, tax expenditures were an invisible expense, a hidden budget until 2019. Open Spaces fought for the publication of a Tax Expense Report and took it to court. The Fiscal Oversight Board also supported the preparation of such a report.

Finally, in September 2019, the Treasury first published its tax expenditures report, which found that these “expenditures” in Puerto Rico total more than $ 20 billion per year. This figure constitutes 20.4% of the gross domestic product or 30.3% of the gross national product and double the annual general budget of the government of Puerto Rico.

Since January 2020, the DDEC, through its website, has also started to publish information about various laws granting credits or exemptions. More than 70 laws empower various government departments and other municipal instruments to grant and regulate tax benefits.

People interested in more information about how tax or tax spending works can access the research conducted by Espacios Abierta at: http://bit.ly/2muzEew