A U.S District Court has turned down a new tax that the Puerto Rican government had tried to impose on the American retailing giant, Walmart. The decision derails the country's effort in boosting up its economy.
Puerto Rico has increased its taxes on companies that invested in the island last year. It was said that the increase was from 2 percent to 6.5 percent, targetting companies which has a total revenue of $2.75 billion, as per Reuters.
Puerto Rican Treasury Secretary Juan Zaragoza-Gomez was sued by the store chain claiming that it was the only company that possess that kind of sales and that the Puerto Rican government violated the U.S constitution on commerce clause by imposing unfair interstate tax.
As reported by the New york Times, Judge Antonio Fuste of the United States District Court of Puerto Rico said in his decision that it gives him no pleasure in throwing the higher taxes considering the situation that their country is facing. He added that it is still an unlawful act wherein Puerto Rico's situation in the economy will not be accepted as an excuse to take away money that is not intended for them.
According to the Washington Post, Puerto Rico Governor Alejandro Garcia Padilla said the judge's decision took away $100 million from the people of Puerto Rico and gave it to Walmart. He said he will fight to change the constitution before the US Congress which aims to create a federal fiscal oversight board to lower the threat to its territory and democracy. He added that he wants to make a board that will audit the government's budget and other fiscal issues.
The island of Puerto Rico is facing a $70 billion unpayable debt and experiences 45 percent of poverty rate across the country. The famous store chain which employs more than 14,000 Puerto Ricans declared the decision as a victory for its employees and local suppliers. Walmart's spokesman, Lorenzo Lopez, said they want to stay in the country to help the financial crisis and is very much grateful that the court sided with them in its decision.
