After a tax review process conducted by the Puerto Rico Ports Authority,
the head passenger tax was significantly increased by 30%, to $13.25, effective on
July 1, 2004. To ensure that such increase would not adversely affect the tourist
industry, Act No. 76 of August 25, 2005 was adopted to create new incentives for
cruise ship companies. Act No. 76-2005 extended the previously established head
passenger tax and the home port incentives and added incentives to cruise ships
that would remain in port for over eight (8) hours, incentives for the number of
passengers, and refunds for purchasing supplies in Puerto Rico. Later, Act No. 99
of June 21, 208 amended Act No. 76-2005 to extend its effective term to Fiscal
Year 2011, extend the application of some incentives to all ports within the
jurisdiction of Puerto Rico, and clarify technical issues within the Act. That is to
say, the effective term of the existing incentives ends on June 30, 2011.
The Port of San Juan and of other towns throughout the Island are part of a
highly competitive sector, mainly due to the fact that new and attractive
destinations continue to emerge in other parts of the world, such as the
Mediterranean Sea, Asia, and Latin America, and in other cities of the continental
United States. For such reason, it is imperative for the Government of Puerto Rico
to ensure that the ports of the Island continue to be regarded as ideal destinations
for the cruise ship industry, which is growing and becoming increasingly
competitive. Thus, it shall be necessary to ensure that the cost of arriving to and
using our ports be reasonable, providing continuity to the traditional incentive
program through a new law.
On the other hand, the success achieved with cruise ships is an opportunity
to promote other tourist areas in Puerto Rico. The offer of incentives must be
broadened, providing the industry with incentives for the sale of travel deals that
include a cruise trip and a stay in a hotel of Puerto Rico, providing incentives not
only for the purchase of products in Puerto Rico, but also for the contracting of