Organizations Unite to Repeal Act 22

A coalition of community and non-profit organizations launched a campagin under the slogan "Not Your Tax Haven".

Organizations fighting against displacement in Puerto Rico launched, this Friday, the education and mobilization campaign called Not Your Tax Haven , in front of the offices of the Tourism Company located in Old San Juan. The initiative, led by a coalition of over a dozen organizations, aims to repeal Law 22 of 2012 (now Law 60 of 2019) and show evidence of the Puerto Rican government’s non-compliance with the enforcement of the law.

The initiative was designed to document “the unreasonable granting of generous tax exemptions” to foreign investors and businessmen, as well as the lack of government transparency, and to denounce the “economic, environmental and housing” impact of the decree, according to a press release issued by the Center for Popular Democracy (CPD), one of the organizations that is part of the Puerto Rico Not for Sale Coalition. The initiative also includes efforts directed at the legislative bodies, said CPD campaigns director Julio López Varona.

In 2012, Luis Fortuño’s administration established a public policy to encourage foreign investors to relocate to Puerto Rico. As part of his 2016 election campaign, Alejandro García Padilla promised to repeal it, but —upon taking office— indicated that he had changed his mind under the influence of his Secretary of Economic Development and Commerce, Alberto Bacó Bagué. In 2019, Ricardo Rosselló repealed the statute, but only to consolidate all tax exemptions in an Incentives Code —now known as Law No. 60 of 2019. Although the law has been amended to call for investment and job creation “requirements,” organizations have denounced that the government does not properly enforce them.

“The government of Puerto Rico passed Act 22 in 2012, with the purpose of attracting what have been called ‘individual investors’. Said law does not contain a single public investment requirement, and today —after 10 years, and granting over 4,000 decrees— the government still does not have the capacity to oversee and publish the reports required by Law 22,” said López Varona.

The Treasury Department’s latest Tax Expenditure Report projects that, in 2023, the government lost $342 million in foregone revenues. When looking at the last six years, the total revenue foregone amounted to $2.2 billion, the coalition said in its press release.

The coalition —explained campaign manager Marilyn Goyco García—  is composed of non-profit and community-based organizations that are “directly affected by Act 22,” such as: Construyamos Otro Acuerdo, VAMOS Puerto Rico, Puerta de Tierra No se Vende, Abolish Act 60, Residents of Puerta de Tierra, Old San Juan Residents Association, Escambrón Unido, Condominium Owners Association, Machuchal Revive Residents Association, Puerta de Tierra se Defiende, Mi Patria, Proyecto Metamorfosis, and Proyecto Revivir PR.

VAMOS Puerto Rico spokesperson, Sandra Cruz García, added that their efforts also include joining organizations from other municipalities in the archipelago, and she anticipated that other regions will be represented soon.  Goyco García shared, in response to questions from 9 Millones, that the coalition is planning talks in Isabela, Toa Baja, Aibonito and Loíza, in coordination with Ayuda Legal Puerto Rico (ALPR).

Some of the campaign’s strategies include distributing information through their website, text messaging and social media. In addition, the coalition is developing a “parallel” effort within the federal sphere, aimed at overseeing the investigation conducted by the Internal Revenue Service (IRS), according to the CPD.

Goyco Garcia explained that, after they discovered that the IRS was conducting an investigation into beneficiaries who were not complying with the requirements to receive the tax exemption, CPD investigators requested information under the federal Freedom of Information Act (FOIA).

The IRS released a memo stating that they were hindered from accessing data from the Department of Economic Development and Commerce (DDEC, in Spanish).

“They say they can’t force DDEC to respond, but that the Congress, with its powers, can help,” the campaign manager said. Following that suggestion, the group began meeting with congressmen in the United States a few months ago.

“We have both campaigns, in parallel, without Congress intervening in the local law, but its role is more to oversee the IRS investigation,” Goyco Garcia summarized.

The campaign took about 8 to 9 months to develop, she told 9 Millones. At first, they focused on gathering data from the list of beneficiaries that appeared on the DDEC web page. The agency began to publish information after the court determined that it was of public interest, following a lawsuit filed by the organization Espacios abiertos. At some point, the researchers noticed that the participants on the list dropped from 26,000 to 16,000.

“We have been asking questions to the DDEC about why that happened and we have not received answers so far, beyond telling us to review the list on the web,” Goyco Garcia said.

The group anticipated that the campaign will extend until the elections, which will be held next year, in November 2024.

Lopez Varona said legislators “will be observed by the public based on their decisions in the coming year,” alluding to the coalition’s non-partisan yet  political stance. “We are going to lobby so that those people, who are going to be making future decisions on legislation, understand that our educational campaign is going to have an impact,” she added.

The movement’s next steps also include activities such as “Occupy Your Beach,” where entire families will be able to attend to educate themselves and rally in accessible ways.

Among the protesters was Kassandra Colón, from CPD’s Puerto Rican diaspora team.

“As a Puerto Rican, it is extremely important to see my homeland and the community where my family comes from truly thrive and have the conditions to prosper…. Fighting back and using it as a way to reclaim our land is the reason people must unite,” she said to 9 Millones.

Journalists Laura M. Quintero and Luis Alfaro Pérez collaborated as editor and proofreader, respectively.

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