Puerto Rico Gov’t Collects $845M in Net Revenue Last Month, $2.5M more than Projected
SAN JUAN – The Puerto Rico Treasury Department announced Friday that government net revenue during December totaled $844.8 million — $2.5 million more than estimates and $9.2 million less than the same period last year, according to a written statement.
Yet, since the beginning of the fiscal year in July, net government revenue tops roughly $3.9 billion, or $21.5 million less than estimated when the commonwealth approved its $9.8 billion budget for fiscal 2016. The Office of Management & Budget recently announced a downward revision to the fiscal 2016 budget, which now sits at about $9.3 billion, after Treasury had previously lowered its revenue projections for the year by approximately $500 million.
According to Treasury Secretary Juan Zaragoza, the effect of this reduction in revenue estimates would be seen during the second half of fiscal 2016, particularly during the last quarter. He added that fiscal year-to-date revenues are in line with revised estimates.
As for the sales & use tax (IVU by its Spanish acronym), $215.4 million was collected last month, an increase of $93.9 million when compared with December 2014. However, the positive difference is mainly attributed to the increase in the IVU tax rate that kicked in last summer, when it went from 7% to 11.5%.
“Nevertheless, the monetary value of the amount subject to the sales tax was similar for both periods. This means that even with the higher rate, the consumption value remained at the same level. This consumption behavior can be explained by several factors. First, in economic terms, as a result of the reduction in costs associated with petroleum-based fuels, which increased consumers’ purchasing power. It can also be explained as a result of fiscal oversight efforts—namely the recent interventions in businesses that were not remitting the sales tax—and a broadened tax base,” Treasury Secretary Juan Zaragoza stated.
Since the beginning of the current fiscal year in July, approximately $1.11 billion has been collected under the higher IVU, according to Treasury’s statement.
Meanwhile, corporate income taxes totaled $231.2 million last month. While it was the principal revenue source in December, it reflects a reduction of $104.5 million when compared with the same period last year. Treasury attributed the slide to the elimination of the gross receipts tax, or patente nacional, for the current tax year.
Nonresident withholdings, which includes royalties from manufacturing patents, totaled $141.2 million, a $62.8 million increase over the same period last year, although mainly attributed to a special payment from a corporation in connection with a U.S. Internal Revenue Service audit adjustment, according to Treasury. Foreign excise tax collections, or Act 154, reached $78 million, a $21.9 million decrease when compared with December 2014. Individual income taxes totaled $173.7 million, a $5.4 million decrease year-over-year.
As for consumption excise taxes in December, alcoholic beverages and cigarettes amounted to $24.9 million and $12.1 million, respectively, both showing decreases when compared with December 2014. Motor vehicle taxes was $33 million, up $4.5 million year-over-year. However, fiscal year-to-date revenue for the latter category is $27.4 million less than the same period last fiscal year, while Treasury stated this can be attributed to $32 million in tax credits claimed by several corporations.