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Puerto Rico Treasury: Sales tax scrutiny strengthens restaurants’ compliance

By on December 10, 2019

Department issues 405 fines

SAN JUAN – Puerto Rico Treasury Secretary Francisco Parés Alicea said Tuesday that establishments that sell prepared foods saw a 6% increase in sales in October, when compared with September, as a result of monitoring and the reduction of the Sales and Use Tax (IVU by its Spanish acronym) rate from 11.5% to 7%.

“During the first month of having implemented the reduced IVU rate of 7%, the monthly IVU returns of merchants selling prepared foods, reflected a 6% increase in sales. This confirms that the technological tools we are using have broadened our visibility of the businesses. Undoubtedly, being able to monitor in real time and constantly the behavior and compliance of the establishments, through the Unified Internal Revenue System (SURI by its Spanish acronym), makes us more effective in collections,” the secretary said in a the press release.

Parés added that consumers have “greatly influenced” businesses to become certified and sell food at the reduced 7% rate.

“The measure has been endorsed by consumers who have mainly sponsored business people who have the certificate of the reduced rate, which has caused the competition to also seek to obtain the certificate and, in turn, be in compliance. It is our commitment and that of the Governor, to establish strategies that benefit all parties and provide better services with the use of technological and advanced tools that help us prevent and avoid tax risks and strengthen the collection system to increase revenues and improve the economy of the Island,” the head of the Treasury said.

The official also said that 405 fines were sent electronically to business owners in this sector for non-compliance with the use of the tax terminal. The department said it was originally going to send 651 notices of fines for non-compliance; “however, this figure was reduced when many reacted to the constant communications sent through SURI.”

The fines did not require personnel inspections, the department said, adding that the average fine was $500.

“Those who understand that there is a reasonable cause that justifies not using the tax terminal that is required by law may request an appeal for administrative review,” the release reads.

On Oct. 1, when the reduced rate of 7% on prepared foods came in effect, “there were 6,113 establishments in compliance; today, there are 7,765,” Treasury added in its release.


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