Puerto Rico Pursues Long-Sought Overhaul of Tangled Tax System

After years of tweaks and modifications, Puerto Rico is pushing for a major overhaul of a tax system that’s been dubbed “grossly unfair” and inequitable.

There are a handful of competing proposals on the table, but most have a common aim: to broaden the tax base and simplify a complex and byzantine system of more than 400 tax breaks. According to one recent study, those breaks—including credits, deductions, deferments, exemptions and preferential rates— cost the administration $23.3 billion a year, or about 21% of its GDP. That figure rises to 31% if measured against its gross national product, the ...