As part of the government’s strategies to increase tax evasion oversight, Puerto Rico Gov. Alejandro García-Padilla sent a bill to the Legislature that will allow the use of certified payment processors in all local businesses, as well as the exchange of information between municipalities and the Treasury Department.
This statute establishes a joint effort to control the exchange of municipal and state information, in which the municipalities will provide Treasury quarterly reports on municipal electronic patent payments.
Meanwhile, the legislation is also an opportunity to modernize the way business is done in Puerto Rico, as instead of having two machines that generate receipts, one for the transaction and one for the Sales and Use Tax (SUT), every business owner would be forced to use Treasury-certified payment processing devices.
This ensures that businesses are registered with the agency and that those in municipalities are operating legally, the bill noted.
“Through this measure, we further this administration’s public policy to more effectively control existing taxes to shore up more resources to the government’s coffers without having to impose more taxes, by promoting the optimum use of public resources while incentivizing Puerto Rico’s economic development,” the draft bill states.
At present, the local government captures about 68 percent of the total SUT collected at points of sale. In recent months, Treasury has begun cracking down on businesses that fail to remit their collections, working with the Justice Department to prosecute specific cases.
As this media outlet reported, last May Treasury announced it had begun working on a number of enforcement and automation initiatives to increase the island’s sales and use tax uptake.