Treasury reports drop in Puerto Rico general fund revenue
SAN JUAN — Puerto Rico Treasury Secretary Raúl Maldonado announced Wednesday that net revenue to the island’s general fund, as of December totaled $697.6 million, $101.9 million less than the same time the year prior and $65.8 million lower than projected for the month.
“When comparing the month’s collections by revenue items with those of the previous year, it is observed that the decrease is attributed mainly to the excise tax for foreign corporations of Act 154, to the departure of other revenue and to the federal rum tax reimbursement. Meanwhile, taxes on alcoholic beverages and cigarettes saw a rise during the month,” the official said.
In the case of the Act 154 excise tax, the drop compared with the previous year was $62.2 million. A factor that explains this variation is that some corporations reached the cap of the excise tax in the previous months corresponding to 2017 and for that reason, they did not have to make payments in December. Other corporations paid less during the year due to production level changes.
The decrease in the line item “others” is related to the transfer of the quarter from October to December of the Lotería Electrónica (Electronic Lottery), whose sales were affected by the passage of hurricanes Irma and María. In December 2016 the general fund received $19.2 million, while no revenue was recorded for December 2017.
Regarding the refund of the federal rum tax, the amount paid into the general fund in December was $ 5.5 million less than the previous year, due to how these funds are distributed monthly.
Collections from the sales & use tax (IVU by its Spanish acronym) in December totaled $233.1 million, some $11.8 million, or 5.3 percent, more than the previous year. Of these, $99.9 million went to the general fund. For the first time in three months, IVU collection exceeded that of the same month of the previous year.
The secretary explained that this behavior was due to several factors; first, in December 2017, unlike December 2016, large taxpayers, as defined in the Internal Revenue Code, pay on the 15th of the month. This meant that part of IVU from Christmas holiday sales was received in December, unlike the previous year, when it was received in January.
Also in December, payments the Treasury Department postponed for several months expired for business owners who are not large taxpayers as temporary relief from the economic effects caused by the passage of hurricanes Irma and Maria.
Maldonado mentioned that total net revenue in the general fund for the first half of the current fiscal year reached $3.6 billion, which represents $348 million, or 8.8 percent, less than the previous year. Compared to the projection for the period, revenues were lower by $157.3 million, or 4.3 percent.