Monday, September 21, 2020

Treasury Broadens SURI Tax Oversight

By on November 26, 2018

Editor’s note: The following originally appeared in the Nov. 22-28, 2018, issue of Caribbean Business.

Starting Dec. 10, the Puerto Rico Treasury Department will broaden its use of the Sistema Unificado de Rentas Internas (SURI, or the Unified Internal Revenue System) to capture five different types of taxes.

This is the second of three phases to implement the island’s new tax system, which was launched in November 2016 to help collect the sales & use tax known as IVU by its Spanish acronym.

The information was provided by Treasury Secretary Teresa Fuentes, Internal Revenue Assistant Secretary Francisco Pares and Johana Rohena, project manager.

In the second phase of the project, Fuentes said Treasury is integrating transactions related to excise taxes, internal revenue licenses, withholdings from the origin and everything related to W-2 forms as well as inheritance and donations. SURI allows for an integrated vision of all tax accounts from a taxpayer, who will be able to make tax payments from their home.

“This allows taxpayers to access their accounts all year,” she said. “SURI provides the technological resources to collect and do oversight, increasing our operational efficiency. It is also good for taxpayers because they will be able to complete transactions in one place.”

Pares said SURI will help Treasury have stronger oversight of taxpayers, stop taxpayers from engaging in risky tax behavior and comply. After SURI was implemented, Treasury was able to collect $44 million in taxes in 2017, which was more than in the previous year despite a drop in the economy. For licenses, not including video-lottery machines, the agency could obtain an additional $14 million.

Fuentes said automatization of certain transactions will not result in layoffs because tax inspectors will be transferred to other areas of work. “Treasury is one of those entities that needs workers,” she said.

Pares said that in the area of tax withholdings from the origin, SURI will allow employers to file up to 2,000 W-2s. They will also be able to renew or pay licenses, including cigarette and alcohol taxes. The filing of various tax forms, such as quarterly employer income-tax filings, will be done through SURI.

In the area of inheritance, taxpayers will be able to file their tax forms with a $25 processing fee and receive their inheritance faster.

There will be some changes in sales & use tax reporting because Treasury will now only require one shipment declaration about shipping goods. However, importers may see a hike in their bonds to ensure Treasury gets paid. In the case of cigarette importers, SURI will verify whether the specific brands of cigarettes are allowed to be imported to Puerto Rico.

Another change is that employers will have 60 days, instead of 30, to renew tax licenses. All license transactions will be done through SURI, he said.

Rohena said a third phase in SURI’s implementation will take place in December 2019 with the launching of income-tax transactions. “This system will allow us to take Treasury where we want it to be,” she said.

Not so open

On the other hand, Fuentes rejected a lawsuit filed by Espacios Abiertos that seeks to make tax decrees public. That is because such agreements contain trade secrets. She said investors will be hindered from coming to Puerto Rico if they know their business information will be public. “The Treasury Department at this time is under the obligation not to reveal tax information. The requirement is imposed by federal tax officials. This would be a bad service to investors and companies that have patents or intellectual property,” she said.

The court recently forced Espacios Abiertos to refile its lawsuit because it failed to include the government. Fuentes, however, said the government cannot provide information about how much funds in decrees will be provided in the future because the amounts vary depending on the company and because Treasury has to wait until the income-tax forms are filed.

Merck General Manager Wendy Perry also objected to the publication of tax decrees. “We are for-profit companies and there is information there that is competitive information that we cannot share,” she said. “Each company is looking into it and will decide what to make public, so as not to put its operations at risk.

Regarding SURI, the Treasury Department said it will be issuing publications and details on how to register for each platform for the various taxes.

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