The Weekly Journal - Wednesday, April 7-13, 2021

Puerto Rico and the Caribbean

www.theweeklyjournal.com

>Carlos Rivera Giusti

Wednesday, April 7-13, 2021 - // no. 102

A New Trend in Buying Homes P6 Investment Opportunities at PRIDCO P8

>AP Photo/J. David Ake, File

Getting Ready to Pack Your Bags P10

The IRS Campaign on Act 22 Beneficiaries Get ready and be prepared

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>Courtesy of Coach

Rosario Fajardo

Hollywood and the Dominican Republic P13

rfajardo@wjournalpr.com

@RosarioWJournal

n Internal Revenue Service (IRS) report has estimated that the thousands of Act 22 beneficiaries in Puerto Rico paid millions to the U.S. Treasury before moving to the island and they subsequently stopped paying, as part of the tax incentives granted under their decrees. Now these individuals are under increased scrutiny by the IRS to ensure they are in compliance with their tax obligations.

Tax and legal experts said the increased scrutiny by the IRS comes on the heels of recent increased interest from the federal government on potential revenue losses from U.S. taxpayers relocating to Puerto Rico.

According to the IRS, its campaign addresses taxpayers who have claimed benefits through Act 22 without meeting the requirements of IRC Section 937 on Residence and Source Rules Involving Possessions. “As a result, these GO TO PAGE 4

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/ Wednesday, April 7, 2021

a week in review Puerto Rico Energy Bureau Approves Small Rate Hike

>Archive

>Archive

The Puerto Rico Energy Bureau (PREB) of the Public Service Regulatory Board rejected the original proposal of the Electric Power Authority (PREPA) for an adjustment of 2.14 cents per kilowatt-hour (kWh), and approved a minor adjustment.

The cost for an average residential consumption of 800 kWh in the quarter that begins in April will be approximately $157.49 from $145.29 in the previous quarter; that is, $12.20 more per month.

Abbot Receives Incentives From PRIDCO to Expand Operations

The medical device company Abbott Vascular Puerto Rico will receive more than $2.6 million in incentives from the Special Fund for Economic Development of the Industrial Development Co. (PRIDCO) to create and retain jobs, in addition to acquiring machinery and equipment to expand its operations on the island. Abbott was granted incentives for the retention of more than 400 employees during a period of five years, from the starting date of the expansion.

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March Was a Banner Month for Alcohol Sales

The month of March has been synonymous with a bonanza for the alcoholic beverages market, and the companies on the island that distribute them have shown a marked increase in sales as part of the Easter holiday period. Ballester Hermanos reported double-digit sales in beers and spirits, while wine sales have doubled. Cervecera de Puerto Rico closed March with a 25 percent sales increase compared to March 2020.

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Phone: 787-622-2300, 787-721-2300 Customer Service: 787-622-7480

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Besides the Condado area of San Juan, many Act 22 beneficiaries also live in Old San Juan and Dorado. >Josian E. Bruno Gómez

CONTINUED FROM PAGE 1 individuals may be excluding income subject to U.S. tax on a filed U.S. income tax return or failing to file and report income subject to U.S. tax.

“This campaign will also address those individuals who have met the requirements of IRC Section 937 but may be erroneously reporting U.S. source income as Puerto Rico source income in order to avoid U.S. taxation. The objective of this campaign is to address noncompliance in this area,” said the IRS on its website.

Although the IRS campaign only references Act 22 beneficiaries, one can reasonably expect that an IRS inquiry into an individual holding an Act 22 decree would likely expand into at least a review of the Act 20 entities that provide sources of income to such individuals, according to law firm Caplin & Drysdale. “Taxpayers should review their reporting positions and, if appropriate, consider

Aggressive deductions are not criminal, but not reporting - or underreporting – income is tax fraud.

- Attorney Francisco Colón-Ramírez, of Porzio, Bromberg & Newman (Puerto Rico)

rectifying past non-compliance now,” said the firm in announcing an alert.

The IRS is currently doing three things as part of its investigations on Act 22 beneficiaries: conducting audits or examinations; sending a “soft letter” to beneficiaries; and community outreach

through a public education campaign. In general a soft letter is a warning sent to a taxpayer inquiring about a tax position they have taken, which in this case would be related to Act 22.

As explained by the IRS, Act 20, also known as the Export Services Act, offers tax incentives for Puerto Rican companies to export services to other jurisdictions. The tax benefits on income derived from customers outside Puerto Rico in relation to services rendered from Puerto Rico included a fixed income tax rate of 4 percent for eligible export services, a 100 percent taxexemption on dividends from earning and profits, and a 60 percent tax-exemption on local municipal taxes.

Be Prepared for an Audit

“Prepare to be examined,” is the advice of attorney Charles “Ched” Falk, of Porzio, Bromberg & Newman, P.C., during a recent webinar on the

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matter. He has handled over 300 cases involving believed to have established new businesses on up to 20 years in prison and a fine up to $250,000 undisclosed bank accounts, mostly in Switzerland. the island. for charges relating to wire fraud.

He explained that among the issues that the Meanwhile, between 2012 and 2019, there have IRS is looking into include whether the Act 22 been 2,331 Act 22 individuals and their families Pending IRS Report on Acts 20 and 22 beneficiary was reporting U.S. sourced income who moved to Puerto Rico. At the beginning As reported by THE WEEKLY JOURNAL, the U.S. as Puerto Rico sourced, which is House Committee Appropriations of the program in 2012, there were 17 Act 22 in violation of the law. Another beneficiaries; by 2019, the figure had increased to is requesting a report from the red flag for the IRS is whether an 418 individuals and their beneficiaries. A big jump IRS detailing Acts 20 and 22 Act 22 beneficiary has any late of 637 Act 22 beneficiaries were registered in 2018, beneficiaries in Puerto Rico, as filings. “They could be subject but government officials said the high number of well as the federal taxes that to penalties, depending on the was due in part to the impact of Hurricane Maria these businesses and individuals Although the forms involved,” he said. on approvals in late 2017. paid in the five years prior to their IRS campaign only In this regard, he said Act 22 Based on IRS data, information on 647 Act 22 move to the island.

The report is references Act 22 beneficiaries should “identify beneficiaries was obtained, which found that these officially due in May 2021. beneficiaries, one can their weak spots” before the individuals paid $558 million in federal income In a report to Congress that reasonably expect IRS comes calling. For example, taxes in the five years before relocating to Puerto was issued in November 2020, that an IRS inquiry is there a lack of records? Is Rico. Most of these individuals and their families the committee “ directs the IRS into an individual there unreported income? Have moved from California, Florida and New York. to submit a report within 180 holding an Act 22 deductions been overstated?

Other states that were represented include New days of enactment of this Act decree would likely Have the right forms been filed?

Jersey, Nevada and Texas. that provides the number of expand into at least “Be honest with your client,” he The “interplay” of Acts 20 and 22, as well as individuals and businesses that a review of the Act 20 advised attorneys. “Go through a Section 933 of the U.S. Internal Revenue Code have relocated from each state entities that provide mock audit.” “enables tax avoidance and denies revenues and the District of Columbia to sources of income to In this regard, a mock audit to Federal, State and territorial governments, Puerto Rico since 2012 and have such individuals. or Act 22 “checkup” would including Puerto Rico,” states the report. been granted tax exemptions be beneficial to identify an A Nov. 2019 study commissioned by DDEC under Puerto Rico Acts 20 and individual’s risk areas, according found that since 2015, the agency has approved 22. The report should include the to CPA Isabel Hernández, who 1,680 decrees for Act 20 on companies exporting amount of Federal taxes paid by is a tax partner Kevane Grant services and that these firms have created an such individuals and businesses Thornton. by type of tax and jurisdiction of former residences estimated 8,257 direct jobs on eligible activities.

Since 2015, the agency also has granted 2,202 during each of the five years prior to their move.” decrees for Act 22 tax exemptions for individuals Based on information from the Puerto Rico Issue of Bona Fide Residency who have relocated to the island. In addition, an Treasury Department, as well as the Economic A key point for the IRS is whether an Act 22 Development and Commerce (DDEC by its Spanish estimated 768 Act 22 decree holders have also beneficiary has bona fide residency in Puerto established businesses in Puerto Rico, creating acronym), there have been 1,924 Act 20 company Rico. There are several ways that the IRS looks at 4,393 jobs. beneficiaries in Puerto between 2012 and 2019. this issue, besides the 183 day minimum rule to The study, conducted before the COVID-19 be in Puerto Rico, she indicated, adding that it is At the start of the program in 2012, 32 companies pandemic, projected about 200 percent growth important for beneficiaries to keep records proving were granted Act 20 benefits; by 2019, that figure in both tax incentive programs during the next 10 their presence on the island. had increased substantially to 583 entities. years.

Another key point is whether an Act 22 An estimated 80 percent of these entities are beneficiary has correctly proven that Puerto Rico is their tax home and whether he/she has developed “closer connections” with the island. These could include making their permanent home in Puerto Rico, whether they have close family here, as well as business and social relations. “Do you have a Puerto Rico driver’s license? Did you get a voter registration card here?” Hernández asked by way of other examples.

While the majority of audits are administrative processes, there is potential for criminal exposure, according to attorney Francisco Colón-Ramírez, of Porzio, Bromberg & Newman (Puerto Rico).

“Aggressive deductions are not criminal, but not reporting - or underreporting – income is tax fraud,” he indicated. “Failure to allocate capital gains correctly between the U.S. and Puerto Rico will lead to underreporting income to the IRS. If the IRS claims you underreported income, the IRS is claiming you committed a crime.”

A case in point is the Puerto Rican CPA who was arrested and indicted on a wire fraud scheme involving Acts 20 and 22. Gabriel F. Hernández, of the now defunct BDO Puerto Rico, was charged with 10 counts of wire fraud. Act 20 offers tax incentives for Puerto Rican companies to export services to other jurisdictions. If found guilty, Hernández faces a maximum statutory sentence of An Act 22 “checkup” is recommended by lawyers and accountants.

In fact,

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Real Estate Transactions in Cash on the Rise

Experts pin trend on inheritances; sources of some money unclear

D

Brenda Vázquez Colón, The Weekly Journal

espite the fact that Puerto Rico has been in an economic crisis for 15 years and with a high unemployment rate, there is demand in the housing market for the purchase of residential units both through financing and in cash transactions, according to representatives of the mortgage sector consulted

by THE WEEKLY JOURNAL. According to census data provided by the Bank Association, 75 percent of residential units in Puerto Rico are occupied, for a total of 1,170,982, of which only 24 percent or a total of 381,725 homes are mortgaged.

The census reflects that 25 percent of the homes are vacant —equivalent to 388,523 units, a percent that exceeds twice the number of vacant housing units in the U.S. z, which is 12 percent.

Therefore, 88 percent of housing units in the United States are occupied.

Industry leaders consulted by THE WEEKLY JOURNAL stated that the acquisition through financing responds to low mortgage interests, while the purchase through cash transactions is the result of inheritance, the sale of other properties or money from unknown sources. In these cases, it is more convenient for buyers to buy in cash and not have to bear the interest on a long-term mortgage.

María Judith Oquendo, advisor and real estate broker, said that there is “a lot of cash sales and the origin of the money is not being seen. This is unlike the bank, in which a mortgage is obliged to establish its origin when it’s made. With this type of transaction, there is no control of the number of sales that there are because this is done through a lawyer, who presents the sale in the property registry.”

There are also other reasons for these transactions to be carried out in cash, as indicated. Among them, that the owners want to sell the property based on the appraised price, and when managing with cash, the property

75 percent of residential units in Puerto Rico are occupied. >Courtesy

valuation is not required to complete the sale.

Meanwhile, in order to buy through refinancing, the property appraisal is mandatory.

Buyers of All Ages

“Many say they are paying with the money from a previous sale, but we do not know if that is the case or when that sale took place. I see young people buying cash and older people. Others say they received money from insurance, but there is no such certainty either. They are buying expensive houses,” assured Oquendo, who is a member of the Board of Brokers, Sellers and Real Estate Companies of the State Department.

Real estate broker Odette Chiesa, of G&M Realty Group, said she has had clients interested in buying residential units who are looking to acquire them without a mortgage loan.

“I have seen cases of people who have received pension money from their work when they retire, people over 60 and young investors in their 30s, who have businesses in the United States and

come to Puerto Rico to buy cash properties,” Chiesa stated.

Moreover, Pedro “Peter” Torres, president of the Mortgage Banking Association explained that this behavior is largely due to the fact that in Puerto Rico there are a large number of houses that are sold out for resale to acquire other homes, so the list of financed homes does not increase when this type of transaction occurs.

“According to the latest census, in Puerto Rico, there are about 1,559,505 housing units and an estimated 350,000 are informal; that is, they do not have a title or are on invaded land.

If these homes are subtracted, there are about 1,100,000 left and according to the statistics of the OCIF (Office of the Commissioner of Financial Institutions), there are over 381,000 active mortgages. So, there are over 700,000 properties left, you don’t have to cancel a mortgage to the bank when they are sold. Many sell these houses, which they should not, to buy another one,” the banker explained.

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About 66.97 percent of occupied positions in the governor’s office at La Fortaleza are “career” jobs. >Carlos Rivera Giusti

Fewer Occupied Job Positions in the Puerto Rico Government

More details on the job specifics or job titles, such as clerical, secretarial, security-related, supervisor or manager, were not available.

The information is available through a new programming carried out by the Puerto Rico Institute of Statistics, which allows for better visualization of the Report of Occupied Positions in The Weekly Journal Staff the government and the ability to compare current information with previous months, among other advantages. he January 2021 Report of For the redesign of this report, the free and Occupied Positions (OPs) in the Puerto Rican government revealed open-source software R was used, which is why it is now done completely through this program, that there are fewer people eliminating manual processes that were previously working in the public sector. This carried out. has been a continuing trend for “This new programming is an advanced more than a decade. one since it optimizes the The latest report, published by efficiency and effectiveness of the Puerto Rico Statistics Institute, the statistical processes on this revealed that the total number of subject, improves our ability to OPs in the government dropped control government positions significantly, from 160,171 in with updated information, and December 2020 to 150,502 in the In Dec. 2020, there allows comparisons to be made first month of 2021. Moreover, were 160,171 with previous years,” said Orville in January 2008, the total number workers in the public Disdier, executive director of the of OPs was 275,448. sector, compared to Statistics Institute.

Collectively, 73.06 percent of all 150,502 in Jan. 2021.

Meanwhile, Ana Jara Castro, government workers are “career” who is responsible for the OPs, 4.51 percent are “trust” redesign of the report at the positions, and 22.43 percent are Institute, said that “the inclusion of listed as “others.” In the governor’s this new table will allow the process of accountability office at La Fortaleza, 66.97 percent of jobs are regarding positions in government entities, to be careers, 24.11 percent are trust positions, and 8.92 a more transparent one, and more accessible to percent are “others.”

In public departments and agencies, 87.93 percent the population. The main objective of this report is to summarize the information of all the agencies are career OPs, 1.67 percent are trust positions, and represented in the Comptroller’s Office on its 10.4 percent are other types of OPs. As for public website.” corporations, 72.64 percent are career jobs, 5.16 are According to the website of the Statistics Institute, trust OPs, and 22.6 percent are listed under “others.”

Statistics Institute launches new tool for government transparency

T

In fact,

The inclusion of this new table will allow the process of accountability regarding positions in government entities, to be a more transparent one.

-Ana Jara Castro of the Statistics Institute

the data presented in the Report of Occupied Government Positions comes from the Registry of Occupied Positions and Related Information, created under Act 103-2006, known as the Law for the Fiscal Reform of the Government of Puerto Rico of 2006. The law establishes that each government entity has the duty to certify this information to the Comptroller’s Office on a monthly basis.

In those cases that the entity has not fulfilled its duty to certify its figures in a timely manner, the Institute makes a simple statistical imputation of the missing data to complete the statistics. All figures are under constant review and may be subject to change in future reports.

Jara stated that the new design includes a monthly report tabulated by agency and type of position, in addition to the time series, with the following information: number of OPs at the end of the reference month, broken down by type of position (career, trust, temporary, irregular, among others) and by type of agency; monthly change in the number of OPs by type of position and by type of entity, and the total OPs for each government entity.

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Many Government Properties Available for Lease

Available for expanding businesses and industries in Puerto Rico

A Christian G. Ramos

cramos@elvocero.com

@cramossegarra

>Archive

n interagency effort between the Puerto Rico Industrial Development Co. (PRIDCO), municipalities and the private sector could be the key to establishing new companies Hewlett Packard in Aguadilla, one of PRIDCO’s many properties in vacant government properties and contribute to the rise of productive estate manager. We will streamline operations available for us,” he affirmed. activity on the island. and make negotiations more flexible, as well as The executive director assured that in addition According to the executive director of PRIDCO, optimize the internal and external process,” Bayón to this strategy, it is urgent to facilitate and Javier Bayón, the government has 1,519 properties added. accelerate approaches, address strategically distributed on the island. The property The executive director also the backlog of cases, streamline portfolio is diverse and consists of industrial pointed out that the properties operations and make negotiations buildings, lots and land. Of the 1,519 profitable under PRIDCO’s custody are more flexible, standardize units available, 429 remain vacant, and of the 766 industrial and commercial in processes and give visibility to lots, 378 are available. Units range from 2,000 to nature, so he understands that future tenants. over 100,000 square feet. their lease will have an impact on Bayón explained that they have Of the 1,519 Bayón said that municipalities and the private more productive activity and more 28 buildings —equivalent to 45 profitable units sector play an important role in the initiative to jobs. Currently, property leasing profitable units— that must be available, 429 bring these spaces back to life. generates approximately $60 demolished.

He explained that remain vacant, and “Some of these vacant properties are not million a year for the government. hurricanes and earthquakes made of the 766 lots, 378 in a position to be profitable, so establishing “Historically, the occupancy some buildings worse, making are available. partnerships with municipalities and the private percentage has been around 70 them extremely expensive to sector to help us market these properties is percent. We want to reduce the 28 repair. “The demolitions have essential for it to percent been recommended by structural be possible to lease that we engineers and began in March,” them. One of the have he stressed. proposals is that available, while allowing Regarding property sales, the director of for properties that us to generate more PRIDCO assured that at the moment they do not are not in optimal economic activity on foresee the liquidation of any property, but he conditions, it is the the island. Our goal is does not rule out that in the future, this may be a municipality itself to optimize properties viable option. “Our vision is to maximize properties or private investors and leases,” the official and leases to enhance economic development. who help us to rescue stated.

This does not mean that there is no room to them,” Bayón said.

Bayón reported that consider future sales,” he said.

-PRIDCO Executive Director PRIDCO works they are in negotiations Javier Bayón alongside the with several companies The Most Recent Transaction Department to occupy some of PRIDCO signed an agreement with Global of Economic the vacant spaces.

Manufacturing LLC (Global Mattress) for the sale Development and He underscored that of a commercial space belonging to the Trade & Commerce (DDEC by its Spanish acronym), Invest although most of the properties are industrial in Export Co., in the area of the Port of Ponce. In Puerto Rico and Discover Puerto Rico to promote nature, any agreement can be considered, as long this transaction, the company seeks to expand the use and occupation of property vacancies as it meets the agency’s requirements. manufacturing operations. The property consists islandwide. “These efforts will result in an effective “Our real estate division receives many requests of a 30,516-square-foot commercial building and a strategy to promote economic development and daily from investors interested in properties, 135,164-square-foot industrial building. Financial become the government’s most effective real both for rent and for sale. There is a good market details were not disclosed.

In fact,

Our real estate division receives many requests daily from investors interested in properties.

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Javier Pecunia, bottom left, launched the company with his business partner in August 2020. >Courtesy of Quibble

Quibble Enhancing Pricing Strategies for Short-Term Rentals

Forecasts point to a high summer season

O Giovanna Garofalo

ggarofalo@wjournalpr.com

@giopgarofalo

uibble, a revenue management company for vacation rentals, is elevating this economic sector through strategic pricing models, just as tourism is on its path to recovery and more travelers opt for short-term rentals.

With short-term rentals experiencing a surge in popularity throughout the pandemic, more people are growing increasingly interested in listing their properties on platforms like Airbnb. According to a Reuters report, Airbnb’s global active listings increased by 2.5 percent year-over-year as of February 2021. At the beginning of 2017, the company had roughly 2.3 million registered units, and by February this year, that number had grown to 5.4 million active listings. As the competition in this market keeps growing, the owners of these properties will need a strategic pricing model, which is where Quibble steps in.

Gustavo Pecunia, Quibble’s co-founder and Chief Technology Officer (CTO), explained that many owners of short-term rentals rely on scraped data, which is information extracted from automated tools. However, the lack of context attached to these numbers makes them prone to

be misinterpreted.

“We know for a fact that the decisions some of these folks are making based on this data can be very misunderstood because the way that we see this data is that there are so many complexities in it, that there is not really a safe way to say that the way that you’re using this data for your pricing model really works,” he told THE WEEKLY JOURNAL. “If you’re using scraped data to establish your price, you are assuming that the market is priced right, and that’s not necessarily the case for the places that we see.”

Neal Cyr, co-founder & CEO, wrote on Quibble’s blog —at www.quibblerm.com— that “it’s common for a novice manager that has never built a forecast before to be off by 50 percent to 70 percent on their first attempt.”

The company is made up of seasoned workers in pricing and revenue management, the travel and hospitality sectors, and forecast analytics, who use a scientific approach to interpret market data and a combination of factors to determine what the price should be. “We are establishing to what degree this month is going to sell. Basically, we’re creating a model that has everything together in it, that’s actually listening to sources that we are fully confident in,” the CTO said.

Regarding customer feedback, he asserted that “the reception has been great. To be honest, I’m not trying to pat myself on the back or anything, but when you see the reaction of the clients, it’s amazing.

I’ve never seen this before. It’s a combination of things, of this feedback that they get. We do have this concept that we say, which is ‘pricing ease of mind,’

and that’s what we want to give folks.”

Moreover, Pecunia observed that current Puerto Rico trends point to a profitable summer for the short-term rentals sector, so property owners should start developing a pricing strategy. “We’re seeing that the trends for travel to Puerto Rico are only going to get better for the summer,” he said, adding that “now is the time to make those adjustments; now is the time to prepare for that summer if you want to capitalize every single dollar.”

Market Presence

Quibble was founded in August 2020. Asked why they decided to launch a new business in the middle of the COVID-19 pandemic, Pecunia said that they had been considering this model “for a long time,” before the health crisis. “I don’t know if it was because of the current situation, but it just became easier to remotely build something,” he explained. Headquartered in Phoenix, Arizona, the company offers its services in the U.S. mainland and Puerto Rico, which is Pecunia’s homeland.

Although the company is less than a year old, Pecunia affirmed that they would eventually branch out to other global markets, but not before perfecting their systems. “One thing that we definitely want to do is to be able to expand to other countries at one point, but we still want to keep on refining these models more, and more, and more. There could be potentially more things that we can figure out to further improve this model. As they say, these models only become better as they keep on maturing when they collect more data,” he stated.

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More Than 75 Percent of Americans Ready to Travel

Tourism: From Crisis to Recovery

T Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

he latest survey data from Destination Analysts has found that the vast majority of Americans are ready to travel again, as COVID-19 vaccinations continue across the nation.

“About two-thirds of Americans are highly open to travel inspiration right now and the number of Americans actively dreaming about and planning travel reached a 2021 peak at 77.7 percent. A 2021 record 33.6 percent researched travel ideas online in the last week, while another record 17.8 percent made earthquakes and a global pandemic, Puerto Rico’s travel reservations or bookings,” said the company tourism industry has clearly been challenged in in its recent travel update. recent years.

In terms of when Americans will go traveling, These experiences have paved the way for July continues to strengthen as a peak month for the island’s tourism leaders to develop recovery travel, as one-third of American travelers now strategies and plan for crisis preparedness, report at least tentative trip plans for that month. helping Puerto Rico’s visitor economy to rebound Travel also looks to continue this fall, as nearly a time and time again, following adversity. These quarter of American experiences and travelers say they the lessons learned have trips planned for were some of the September and about topics of discussion 22 percent have at during a recent virtual least tentative plans in panel sponsored October, according to

by Discover Puerto Destination Analysts.

Rico, the island’s However, when destination marketing asked the likelihood organization (DMO).

- Don Welsh, president and CEO of that the U.S. will “There is nothing Destinations International experience another more critical than COVID surge in 2021, learning from the 53.8 percent of challenges COVID-19 American travelers has presented for our said that this was indeed likely—an anticipation industry, and sharing them for the global travel strongest in the Midwest and among older and tourism community to collectively look to the travelers. future with takeaways that help lay a foundation On average, though, American travelers believe for recovery,” said Brad Dean, CEO of Discover the United States is 52.6 percent back to normalcy Puerto Rico. right now. Nearly half believe their life will be back to “normal” by September.

Lessons Learned From COVID-19 The survey of more than 1,200 American Key themes shared by the panelists included the travelers was conducted between April 2 and 4. importance of crisis preparedness, with scenario The overall optimism of the latest Destination planning as a critical tactic implemented by the Analyst survey is helping to buoy up the local travel Cruise Lines International Association (CLIA), industry. From hurricanes, to political unrest, Marriott International and Discover Puerto Rico.

Travel is part of the human DNA… nothing can replace the real experience of travel.

The Amazing Grace in San Juan Bay >Courtesy

“Regardless of how up-to-date your crisis manual is - without scenario planning and debriefing after crises to enhance and build upon those learnings, you have nothing,” said Anne Madison from CLIA. Transparency, constant communication and agility also reigned supreme as priorities during the pandemic, and something each panelist shared should remain in the future. “Communication, adaptability and responding with real, relevant and timely information was the best thing we could do” said Don Welsh, president and CEO of Destinations International, whose organization held 64 webinars during the pandemic’s peak to provide crucial information to the global industry.

Data and research equally remain at the center of the panelists’ organizations as they look to the future. CLIA, for example, increased frequency of sentiment tracking to better understand message resonation, while economic data demonstrating the impact of cruising was also utilized at key moments in time.

Diana Plazas of Marriott International specifically highlighted the use of digital tools to gather research, inclusive of how the global hotel company is leveraging their mobile app to hear from guests. “This is here to stay,” she said.

While strategies and tactic implementation varied among the speakers, an overarching agreement of the travel industry’s future – despite uncertainty – remained clear. “Travel is part of the human DNA… nothing can replace the real experience of travel,” said Welsh, who shared the insight that even amid the pandemic’s height, many people still planned trips understanding that they would be canceled.

11 < The Weekly Journal > Wednesday, April 7, 2021

Luego de un fuego u otro desastre, la Cruz Roja Americana provee ayuda financiera, apoyo emocional y asiste en la recuperación de las familias afectadas. Si usted ha sido afectado por un desastre, llame al 787-758-8150.

¡Dona hoy!

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Juan Zaragoza

Puerto Rico Senator of the Popular Democratic Party

The Earned Income Tax Credit “Design is not just what it looks like and feels like. Design is how it works.”

- Steve Jobs

S

ince 1975, the U.S, tax system has provided some sort of Earned Income Tax Credit (EITC) to working individuals. This credit is designed to attack poverty, increase labor participation, and motivate people from the underground economy to formalize their business activities.

This credit has always excluded Puerto Rico residents from its benefits.

Currently, under Puerto Rico tax laws, individuals qualify for an earned income tax credit ranging from $300 to $2,000, depending on their income levels, marital status and number of dependents.

During 2019, approximately 258,000

taxpayers claimed the EITC for a total amount of $115 million.

As a result of the recent enactment of the American Rescue Plan Act (ARPA), Puerto Rico residents are included under the U.S. EITC. As proposed and subject to certain requirements, Puerto Rico could see the current local budget appropriation of approximately $200 million, matched with an additional $600 million of federal funds, thus creating a pool in excess of $800 million dollars on an annual basis.

Under ARPA, the Puerto Rico Government has the flexibility of designing the credit based on local economics and demographics.

Recently, the Honorable Governor of Puerto Rico, Pedro Pierluisi, indicated his inclination to design the local EITC based on the same parameters as the one in the U.S. The design of the local EITC must

be adapted from the U.S. to Puerto Rico. These are two jurisdictions with extremely different economies, poverty levels, number of minimum wage employees and demographic characteristics. Adopting the EITC as currently designed in the U.S. would simply not work in Puerto Rico in terms of complying with its objectives of attacking poverty, increasing labor participation and attacking the informal economy.

The U.S. EITC is designed based on an economy with very few individuals earning minimum wage (contrary to Puerto Rico) and individuals or couples having one or more qualifying children (as compared to low fertility levels in Puerto Rico). This is evidenced by the fact that under the current structure, a single individual with no qualifying children making more than $15,280 per year or approximately $7.35 per hour,

Víctor Rodríguez

Public Affairs Specialist (Puerto Rico and the USVI) Social Security Administration

T

housands of people get monthly Social Security benefits in Puerto Rico and the U.S. Virgin Islands.

Some need help managing their money. When we receive information that indicates you need help, we will assign a representative payee to manage your benefits for you. We try to select someone who knows you and wants to help you.

A representative payee receives your monthly benefit payment

What are Social Security Representative Payees? on your behalf and must use the money to pay for your current needs, including: Housing and utilities; Food; Medical and dental expenses; Personal care items; Clothing; and Rehabilitation expenses (if you are disabled).

If you need help managing your benefits, tell a Social Security representative that there is someone you want to be your representative payee. They should be someone you trust and see often, and who clearly understands your needs. Social service agencies, nursing homes and other organizations are also qualified to

be your representative payee. Ask them to contact us.

You can write to us within 60 days of being assigned a representative payee if you do not agree that you need one or if you want a different representative payee.

We also offer an option, called Advance Designation, which allows you to choose a representative payee in advance. In the event you can no longer make your own financial decisions, you and your family will have peace of mind knowing you already chose someone you trust to manage your

would be entitled to no EITC at all.

Similarly, married couples earning more than $21,740 annually would not qualify for any amount of tax credit.

Under the U.S. rules, the credit grows exponentially, depending on the number of qualifying children.

For example, a single individual with three qualifying children earning $35,500 annually would get a $3,255 tax credit. For this type of taxpayer, the complete phaseout of the credit (i.e. the point in which the taxpayer would not be entitled to the credit) would occur at an income level of approximately $51,000 a year.

An alternative to this structure would be to design an EITC which is targeted toward low income individuals. For example, granting a $4,800 tax credit to an individual earning minimum wage would have the effect of raising the individual’s compensation from $7.25 per hour to approximately $10 per hour, with no cost to the employer.

The changes proposed under ARPA give Puerto Rico a unique opportunity to properly fund a well-designed EITC that would help us attain the desired economic development objectives. Adopting the U.S. model will waste a great opportunity to attack poverty and raise the living standard of thousands of Puerto Ricans.

benefits.

You can submit your advance designation request when you apply for benefits or after you are already receiving benefits. You may do so through your personal my Social Security account at www.ssa. gov/myaccount, by telephone or in person.

You can find more information at http://www.ssa.gov/payee.

Due to the COVID-19 pandemic, we cannot receive visitors at our field office except for previously arranged appointments on special limited, critical situations. However, we continue providing our services by phone and internet. If you have questions on Social Security benefits and services, please access www.socialsecurity.gov. You can also access our automated services at 1-800-772-1213 or call your local Social Security office Monday to Friday from 9 a.m. to 4 p.m. To locate the telephone number of your local field office, please input your residential zip code at www. ssa.gov/locator/.

13

/ Wednesday, April 7, 2021

Hollywood Shines

in the Dominican Republic Filming has brought in $152 million since the pandemic began

P

The Weekly Journal Staff

uerto Rico has long tried to attract Hollywood to film on the island, with success in such endeavors as “The Rum Diary,” “Contact,” “Golden Eye” and “Amistad.”

Now it seems that the Dominican Republic has become a popular filming location for Hollywood, so much so that the Dominican Republic government estimates that recent film productions have brought in $152 million to the Caribbean country’s coffers since the coronavirus pandemic began more than a year ago.

The presence of Hollywood celebrities such as Mark Wahlberg, Vin Diesel and Jennifer López in the country has attracted the attention of the public and the media, who closely follow their movements to the different sites chosen by the film industry to shoot the films.

Wahlberg is shooting his new movie “Arthur the King” and just finished filming on locations in the Colonial City of Santo Domingo, after two months of work. Such has been the welcome he has received in the Dominican Republic that he revealed his plans to build a house in the Cabrera community, located in the María Trinidad Sánchez province (the northeast region of the country).

The actor shared the details in a courtesy visit to the mayor of the National District, Carolina Mejía, taking advantage of a break from filming in Colón Park and the Catedral Primada de América.

Wahlberg has been in the Dominican Republic since February. The film was being shot in Las Terrenas, Samaná, and from there he published photographs and videos of the beaches, as well as sharing with various community members while enjoying a Presidente beer.

Wahlberg is known for his performance in films such as “Ted,” “The Departed,” by Martin Scorsese, and blockbuster franchises such as “Transformers.”

JLo and her Entourage

Another attraction is the Puerto Rican singer and actress Jennifer López, who had been in the country for several days recording the movie “Shotgun Wedding,” accompanied by a team of

The actress has starred in a variety of films including “Hustlers,” “Monster-in-Law,” “El Cantante,” “Jack,” “Selena,” “Money Train,” “Maid in Manhattan,” “Anaconda,” “Angel Eyes,” “The Wedding Planner,” “The Back-Up Plan” and “What to Expect When You’re Expecting,” among others.

Vin Diesel is another Hollywood celebrity who has been filming on Dominican soil. He has been shooting his scenes for “Fast and Furious 9,” with several of these being filmed in the tourist zones of Punta Cana’s private retreat, Cap Cana. Punta Cana and Santo Domingo are also among the vacation spots of stars such as NBA legend The presence Michael Jordan, of Hollywood Spanish singer celebrities such as Julio Iglesias, Mark Wahlberg, Juventus player Vin Diesel and Cristiano Jennifer López in the Ronaldo, Puerto Dominican Republic Rican singer has attracted the Mark Anthony, attention of the and many public and the others. media.

“Great week of filming with my Dominican crew. Thanks for everything, my people! All love, always,” Diesel wrote on March 19 on his Instagram account along with a picture of him and the crew.

Vin Diesel has been a regular visitor to the Dominican Republic for over 10 years. It is normal for locals to see him walking through different areas of the country with complete freedom and happiness.

In January he met with President Luis Abinader in the province of Puerto Plata. The meeting took place in the municipality of Luperón, where the president attended a meeting with tourist investors. At that time, the actor was seen on social networks in a photograph with Abinader, Tourism Minister David Collado, and the administrative officer of the Presidency, José Paliza, who is a native of Puerto Plata.

Apart from the nine installments of the “Fast and Furious” blockbuster franchise, Diesel has been in over 20 films, including “Bloodshot,” “Riddick,” “Guardians of the Galaxy,” “Saving Private Ryan,” “Babylon A.D.,” “The Last Witch Hunter,” “Ralph Breaks the Internet,” “The Pacifier” and “Boiler Room,” among others.

In fact,

Jennifer López has been filming “Shotgun Wedding” in the Dominican Republic. >Archive

more than 10 people that includes two assistants, two teachers, her chef, her stylist and three members of her personal security.

The Puerto Rican actress, known as the Diva from the Bronx, had been staying with her children in a villa in Casa de Campo, located in La Romana, about 76 miles from Santo Domingo.

She has been visited by her fiancé, Alex Rodríguez, a former player for the New York Yankees baseball team, who seized the opportunity to play golf with some friends.

14

/ Wednesday, April 7, 2021

Mezcal, right, is a distilled spirit made from the agave plant.

Young Entrepreneur Launches Exclusive Club for Mezcal Lovers Users can participate in tasting sessions and events at bars and restaurants

F

Mezcal is the oldest distilled spirit in the Americas and has a very important social and cultural meaning for the communities that make it by hand in Mexico.

The Weekly Journal Staff

or the past several months, mezcal has become the trendiest distilled spirit of the moment. But what is mezcal?

This is a drink distilled from any type of agave plant, native to Mexico and with an incredible history of more than 400 years. Although it is not as popular as its cousin, tequila — which is made from the heart of the blue agave plant — people are growing increasingly interested in tasting this smoky spirit. Its popularity is due to many market factors and its extraordinary taste, but most importantly, it is here to stay.

The drink captured the attention and palate of young Puerto Rican, Paul E. González Mangual, on one of his trips to Mexico.

Since he took that first sip, mezcal conquered his heart, and for this reason, he decided to enter the world of this drink, educate himself and commit to promoting its culture in Puerto Rico.

With a diploma as a promoter of the mezcal culture awarded by the Center for Studies on Maguey and Mezcal (CEMMEZ by its Spanish acronym) located in the state of Oaxaca in Mexico, and multiple trips to learn about the tradition of

- Paul González, founder of Club Mezcal

Members of Club Mezcal can participate in monthly tasting sessions. >Courtesy

making mezcal, he decided to give life to a new project called Club Mezcal, an educational platform to learn, understand and appreciate one of the agave distillates with the most mysticism and history in the world.

“With Club Mezcal, my goal is to be an ambassador for the mezcal category in Puerto Rico and the Caribbean to make visible and promote this historical background that surrounds this distilled spirit,” said González, who founded Club Mezcal this year.

Through Club Mezcal, users will have the opportunity to participate in monthly mezcal tasting sessions (both online and in-person),

participate in events at bars and restaurants, receive curated information about the world of mezcal, interact with industry experts and become a member of “Club Mezcalero,” an initiative that will be launched this summer. In addition, the platform includes a series of specialized training sessions for waiters, managers and bartenders, plus corporate events and partnerships with complementary products.

“Over 30 different brands of mezcal are already imported into Puerto Rico, and this is just the beginning. The response of the public when trying mezcal, either alone or in a drink is incredible, and this has changed the rules of the game when it comes to enjoying cocktails or complementing a dinner. That is why it is so important to understand its history, culture, and tradition in order to pay tribute to it in the best possible way,” said González, who is also a certified bartender.

Religion in / Wednesday, April 7, 2021

15

Times of a Pandemic Fewer Americans attending places of worship

T Juan Hernández

Special for The Weekly Journal

he religiosity of Americans seems to have diminished despite the national crisis wrought by the COVID-19 pandemic, according to a recent poll from Gallup.

According to the poll, an average of 48 percent of Americans said in 2020 that religion “is very important” in their lives. Gallup informed that this statistic is the lowest on record since it began recording it in 1952. Back then, 75 percent of Americans rated religion as a “very important” part of their lives.

While the Gallup report states the importance of religion has fluctuated over time, such fluctuations peaked at 64 percent in 2001 after the 9/11 terrorist attacks, and 65 percent in 2002, a year after the attacks. The peaks seemed to be related to the crisis caused by the attacks. But this last year, religiosity took a dive despite the pandemic.

In 2020, 33 percent of Americans also considered that the influence of religion has increased on American Society, compared to just 19 percent in 2019. But this statistic contrasts sharply with the personal attendance in a church, synagogue or mosque in the seven days prior to the poll. Only 30 percent of Americans said they had visited a religious place of worship, at least seven days before answering the poll. In 2019, the number of church-going Americans was 34 percent.

Virtual Worship Attendance Also Down

Gallup estimates the decline could be a direct consequence “of the pandemic on Americans’ ability to physically attend houses of worship due to closures and capacity limitations.” But as virtual worship services became a new way of participating in religious services, Gallup also polled Americans on whether they attended “in person or remotely.” The poll revealed that 27 percent and 28 percent of those attending a religious service in April and May 2020, respectively, did so remotely, and less than 5 percent attended in person.

On a related matter, membership to a specific house of worship continued to decrease in 2020, reaching an all-time low of 47 percent of Americans belonging to a church, synagogue or

Despite a drop in church attendance, more Americans believe religion has increased its influence on society.

mosque. That is 3 percent less when compared to 2018, and 23 percent less when compared to 1999.

According to the analytics and advisory company, the decline in religious membership is mainly due to an increase in the lack of religious affiliation and generational differences.

The decline in church membership is being attributed by Gallup to “the increasing number of Americans who express no religious preference.”

According to the poll, the percentage of Americans who do not identify with any religion has grown from 8 percent (1998-2000) to 21 percent (2018-2000).

Gallup argues that “as would be expected, Americans without a religious preference are highly unlikely to belong to a church, synagogue or mosque.”

Generational Differences

Furthermore, Gallup considers church membership to be correlated with age, with older adults more likely to be members of a specific house of worship than the younger generations (baby boomers, generation Xers and millennials). Nevertheless, Gallup admits population replacement “doesn’t fully explain the decline in church membership,” since adults in older generations have been decreasing their church memberships for the last two decades. The

number of Americans without a religious affiliation has almost doubled in each generation.

The decline in church membership includes not only those without a religious affiliation but also those who do have one in each of the generations polled. According to Gallup, these decreasing church memberships range between six and eight percentage points over the last 20 years for traditionalists, baby boomers and generation Xers who identified themselves with a specific religious belief. In the case of millennials, church membership dropped from 63 percent to 50 percent in the last 10 years.

Catholics are identified as the religious group experiencing the most significant loss in membership, dropping from 76 percent to 58 percent, or 18 percent fewer Catholics. On the other hand, among Protestants, the loss was nine percentage points, from 73 percent to 64 percent.

Despite dwindling attendance to the different houses of worship throughout the United States and the impact that the coronavirus pandemic has had on the American people, the importance religion has in their lives remains unfazed, albeit it being at an all-time low. The challenge religious leaders must face now is to find or devise a way to attract those who do affiliate to a specific religion to become active church members.

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