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Puerto Rico Treasury: Net January revenue exceeded projections

By on April 15, 2019

Treasury Secretary Raúl Maldonado (CB file photo)

Over $23 million more than forecast in October’s revised fiscal plan

SAN JUAN – Puerto Rico Chief Financial Officer and Treasury Secretary Raúl Maldonado Gautier announced Monday that net revenues to the island’s General Fund totaled $717.9 million in January.

“Compared to January 2018 revenues, there was $133.3 million net increase. January 2019 revenues were $188.3 million above the June 29, 2018 Certified Fiscal Plan projections and $23.5 million above the October 23, 2018 Certified Fiscal Plan revised projections,” Maldonado Gautier said, adding that “revenue behavior shows the Government has been meeting the revenue projections that were established,” the release reads.  

Individual and corporate income taxes, the foreign corporations excise tax (Act 154) and the motor vehicle excise tax categories were the main revenue drivers.

Maldonado also pointed out that corporate income tax revenue totaled $95.1 million in January, a $31.1 million year-over-year increase, and $23 million more than revised projections.

“The Act 154 excise tax on foreign corporations totaled $61.8 million, that is, an increase of $3.2 million compared to the previous year. Revenues for this tax category are always lower in the month of January because several corporations reach the annual tax cap in previous months and, therefore, do not make payments in January,” he said.

The Treasury chief stressed that motor-vehicle excise tax collections continue to grow.

“These collections have been the highest every month of this fiscal year since 2006, that is, for the past 13 years,” Treasury said in its statement, quoting Maldonado as saying, “In January of this year, the revenue was $43.9 million, $3.0 million, or 7.3 percent, above last year.”

The sales and use tax (SUT, or IVU by its Spanish acronym) collections totaled $261.2 million.

“This amount was $34.7 million higher than SUT collections in January 2018 and similar to collections in January 2017. $193.0 million of total January SUT collections was distributed to the General Fund, $94.2 million more than in January 2018. This change is explained by the fact that distributions to COFINA [Spanish acronym for Sales Tax Financing Corp.] were completed in January, as opposed to last year when this occurred in February. As a result, revenues to the General Fund were higher. It is important to point out that the COFINA Adjustment Plan Agreement was approved by the Court on February 5, 2019, and therefore, does not affect revenues reported in January,” the Maldonado explained.

Fiscal year-to-date (July-January) net revenue totaled $5.12 billion, an increase of $902.6 million, or 21.4 percent, year-over-year, “which was affected by the passage of Hurricanes Irma and María,” the release reads, adding that “fiscal year-to-date revenues were $950.5 million above original projections and $141.4 million above revised projections, which is attributed, in turn, to the economic recovery after the passage of the hurricanes.”

Treasury added that on Dec. 10, the second phase of the Internal Revenue Unified System’s (SURI by its Spanish acronym) implementation went into effect. Taxes collected through SURI are withholdings at source, licenses, SUT and excise taxes. January was the first full month under the new system.

However, compared with the revised certified fiscal plan’s projections in October, individual income tax revenue fell short by $27.8 million, as did non-resident withholdings, by $35.8 million; the sales tax, by $16 million; the tax on tobacco, by $23.5 million; and the rum tax, ny $9.4 million.

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