The Open Spaces (EA) organization went to court as an intervener 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, against action in a lawsuit by Puerto Rico Privacy Association, Inc. (PRPA), which claims that this action violates the privacy of its members, a group of unidentified investors.
Justice, representing the defendants – the DDEC and the Treasury Department – indicated during the hearing yesterday afternoon by Judge Anthony Cuevas Ramos of the San Juan Tribunal Extraordinary Board of Appeal that the publication of the Information in relation to the granted tax decisions is prepared 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. For their part, three lawyers from the law firm Block Legal, representatives of PRPA, have filed their opposition to the dismissal, insisting that the information be published in violation of the privacy of those receiving the decrees and undermine their contractual relationship with the government.
Open Spaces questioned the active legitimacy of the association that had filed the lawsuit and joined the D-Dec’s arguments in favor of the dismissal.
Our people must have access to the uses spent on every penny 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 expenditure, for which both the government and those who receive these concessions must be held accountable, ”explains Blondet. “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. At the same time, he pointed out that there are platforms like the Good Jobs First Subsidy tracker that collect the information disclosed by the various US jurisdictions and make it easily accessible.
Open Spaces fought for the publication of a Tax Expense Report and took it to court. The Fiscal Oversight Board for its part also supported the preparation of such a report. Finally, in September 2019, the Department of the Treasury first published the Tax Expenditures Report, which found that these “expenditures” in Puerto Rico total more than $ 20 billion a 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. And since January 2020, the DDEC also began to publish information on various laws granting credits or exemptions through its website. More than 70 laws empower various government departments and other municipal instruments to grant and regulate tax benefits.