The organization Espais Oberts (EA) went to court as an intervener in support of the position of the Department of Economic Development and Trade (DDEC) to publish the list of beneficiaries of decrees under laws 20 and 22, an action objected to a lawsuit by the Puerto Rico Privacy Association, Inc. (PRPA), alleging this action violates the privacy of its members, a group of unidentified investors.
Justice, who represents the defendants – the DDEC and the Department of Finance – indicated during the hearing held yesterday afternoon by Judge Anthony Cuevas Ramos, of the Extraordinary Appeals Chamber of the Court of San Juan, that the publication of the information related to the contributory decrees granted is made in accordance with the mandate of Law 60 of 2019 (known as the new Puerto Rico Incentive Code).
He stressed that contrary to the plaintiffs’ argument, the information published is not confidential, personal or financial. For their part, three lawyers from the law firm Block Legal, representatives of PRPA, presented their opposition to the rejection insisting on the publication of the information violates the privacy of those receiving the decrees and undermines their contractual relationship with the government.
Espais Oberts questioned the active legitimacy of the association that filed the lawsuit while joining the arguments presented by the DDEC in favor of dismissal.
Our people must have access to know the use that is given to every penny of public money, this includes knowing who receives it and in what capacity it receives it. This applies in the same way to contributory privileges. The money that is left in 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.” Without clear and accurate information we cannot evaluate the return on investment of these concessions and ascertain whether the desired social benefit has been achieved. In times of crisis, where austerity measures are imposed and services are cut for the population, the country cannot go blind on fiscal and budgetary issues. Every dollar counts and knowing is our right, “he said.
Tax or tax expenditures are all exclusions, deductions, exemptions, and contributory credits, among others, that the government gives to different types of taxpayers: individuals, businesses, industries, and nonprofits. In general, these concessions are authorized by law in order to encourage economic activity or achieve a social impact. Tax concessions are categorized as government expenditure incurred under the tax code, and like all government public expenditure, this information must be available to the public.
“The disclosure made by the Treasury and the DDEC is recent and historic. A step towards greater transparency, something that must be recognized and protected,” said Blondet. At the same time he pointed out that there are platforms such as the Good Jobs First Subsidy-tracker that collect and make easily accessible the information disseminated by different US jurisdictions.
Open Spaces fought the battle for the publication of a tax expense report and took it to court. For its part, the Board of Fiscal Supervision also supported the production of such a report. Finally, the Department of the Treasury in September 2019 first released the Tax Expenditures Report, which revealed that these “expenses” in Puerto Rico total more than $ 20 billion annually. This figure constitutes 20.4% of the Gross Domestic Product or 30.3% of the National Gross Product and twice the annual general budget of the government of Puerto Rico. And from January 2020, the DDEC through its website, also began to publish information related to several of the laws granting credits or exemptions. About 70 laws authorize various government departments and other municipal instrumentalities to grant and regulate contributory concessions.