Auto sales in Puerto Rico experienced worst month this year

Auto sales in Puerto Rico experienced worst month this year

By : LUIS J. VALENTÍN   cbnewsroom@gmail.com; cbprdigital@gmail.com

The United Automobile Importers Group (GUIA by its Spanish acronym) reported Wednesday that the auto industry in Puerto Rico experienced an 18.2% drop in sales last month, when compared with March 2014. New-auto sales on the island totaled 7,079 units during March, or 1,579 fewer units sold when compared to March 2014, according to GUIA.

“We are facing one of the worst periods that our industry has lived. As a matter of fact, we can compare this period with 2009, when the worst world economic contraction was experienced since the Great Depression. We are following the discussions related to tax issues and the effect that the proposed changes could have on our industry and consumers,” commented José Ordeix, president of GUIA, an independent organization that represents the local auto industry. Its members represent more than 96% of all automobile sales in Puerto Rico.

Since 2014, demand on the island has been on a free-fall, experiencing 12-consecutive months of reduction in sales. For the first trimester of the year, total auto sales in Puerto Rico are down by 14.7%, or 3,421 fewer units, when compared with the same period in 2014, GUIA reported. Retail and fleet sales have dropped by 12.9% and 34.4%, respectively, for the year.

Representative predicts collapse of banks, credit unions with ‘megastore tax’

By : Inter News Service   cbprdigital@gmail.com

New Progressive Party (PNP) Rep. Ricardo Llerandi Cruz warned that if «the so-called megastore tax were to be approved, the fragile banking industry on the island would suffer a near-fatal blow.»

This is because «it also will impose an additional tax burden on construction companies, car dealerships, banks, insurance companies, gas stations and even the vast majority of cooperatives in Puerto Rico,» he said.

«We have analyzed very carefully the nefarious House Bill 2376, which proposes to impose on the vast majority of businesses on the island an additional tax to what they already pay. This measure directly affects Puerto Rican companies,» the legislator said.

He recalled that in past years, the operations of such financial institutions as Doral, RG, Westernbank and Eurobank have closed due to a lack of capital. «The same will happen to most banks if the bill, which is not exclusively for megastores, is passed,» Llerandi Cruz said .

The representative explained that the blow to the construction industry, «which has still not pulled out from the recession,» will be devastating, as the project considers everything as gross income for tax purposes, without excluding operational cost items.

«For car and truck dealerships, and even buses, the bill does not allow the deduction of the cost of units to be sold nor the costs involved in transporting vehicles, which,» according to Llerandi Cruz, «will accelerate the closure of several of these dealerships selling cars and buses, because the cost of maritime shipping is increasing.»

«The bill says all dividends received by a domestic corporation, many of which are held by Puerto Ricans, controlled up to the deduction amount allowed under section 1033.19 (a) (1) (D) of the Internal Revenue Code, will be taxed up to 85 percent of the amount received as dividends,» he argued.

Llerandi Cruz urged the legislative majority to reject this new tax on all businesses mentioned, because it threatens the financial stability of the private sector in general.