Debt-Ridden Puerto Rico Plans to Become Tax Haven to Attract US Wealth
On Monday, Puerto Rico defaulted on its debt for the first time in history, repaying only $628,000 of a $58 million portion of the total $73 billion it owes. The White House said on Tuesday that it had no plans to bailout the small island nation, which is an unincorporated US territory.
MOSCOW (Sputnik) — The indebted Caribbean island of Puerto Rico is seeking to replenish its coffers with cash from wealthy US citizens by becoming a new tax haven, US media reported Thursday.
Puerto Rico introduced laws in 2012 that offered tax exemptions and corporate tax cuts, measures that have since attracted around 250 millionaires from mainland United States to the island, CNN estimated on Thursday.
At the same time, Puerto Ricans have been leaving the island in thousands to look for a better life in the US states, reducing its tax base, the outlet added.
Despite this controversy, CNN cited businesspeople in Puerto Rico as saying that the nation had a chance of attracting foreign companies and creating more jobs, since businesses are being enticed to the island by its much lower corporate tax rate of 4 percent, compared to 35 percent in continental United States.