Puerto Rico warns GOP tax bill would hit its already reeling economy

Dawn Giel | CNBC

Governor of Puerto Rico, Ricardo “Ricky” Rossello, on June 8, 2017.

Puerto Rico is crying foul on a provision in the final Republican tax plan that its governor says will do more harm to an already reeling economy.

The GOP bill released Friday and expected to pass next week would treat American companies functioning in the commonwealth as they would those abroad, according to The New York Times. It would put a 12.5 percent tax on the income the businesses get from intellectual property, the newspaper reported.

Puerto Rico Gov. Ricardo Rossello argues that the bill could cause more damage to the economy of the commonwealth, which is already bankrupt and struggling to recover from the devastation of Hurricane Maria earlier this year. He says the tax measure could harm efforts to spur job creation and economic recovery in Puerto Rico.

“It is devastating and unconscionable that Congress would do this at this juncture,” Rossello told NBC News on Friday.

Rossello contends that the plan shows congressional leaders have “turned a blind eye” to the island, which is still trying to restore power following the natural disaster.

The U.S. government is committed to helping Puerto Rico, said Rep. Kevin Brady, R-Texas, who led the House and Senate conference committee that crafted the final bill. On Friday, the congressman said a provision to create so-called opportunity zones to spur manufacturing on the island could not get included due to Senate rules. Congress hopes to do so in subsequent legislation, Brady said.

“I think more can be done as well, but I think this is important. We are just absolutely committed to helping that island rebuild,” he told reporters.

Separately Friday, Rossello sent a letter to Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan requesting tens of billions of dollars in additional disaster relief funding before the end of the year.