Puerto Rico’s fiscal year tax revenue hits record $13.4B
Treasury surpasses projections by $1.01 billion, driven by excise taxes and corporate income.
Puerto Rico Treasury Secretary Nelson Pérez-Méndez announced that preliminary general fund net revenue for the recently concluded 2024 fiscal year (July 2023 to June 2024) reached $13.4 billion, setting a historic record for the island’s tax collection.
“Compared to the previous fiscal year’s revenues, collections exceeded $764 million, which represents a 6% increase,” Pérez-Méndez said. “Likewise, the Treasury surpassed the revenue projections prepared by the Financial Oversight and Management Board by $1.01 billion, an 8% increase.”
Pérez-Méndez also noted that Gov. Pedro Pierluisi’s administration has surpassed the board’s revenue projections over several fiscal years. He attributed this year’s increase primarily to economic activity related to recovery efforts.
“With regard to the revenues from different types of taxes, the best-performing category during the 2023-2024 fiscal year, with the highest percentage contribution, was the excise tax on petroleum-derived products. Revenues from this source started being accounted for in the general fund last fiscal year. Previously, most of them were recorded under ‘Other General Fund Revenues.’”
Revenues from this category totaled $590 million, an increase of $497 million, or 535%, compared to the previous fiscal year. Regarding the oversight board’s projections, revenues exceeded by $59 million, an additional 11%.
This was followed by “Withholding on Non-Residents,” which generated $985 million, a 49% increase over the prior fiscal year and 7% above projections. Payments from foreign entities under Act 52 of 2022 accounted for 55.4% of the total.
Corporate income tax collections also saw significant growth, reaching $3.35 billion, up $396 million, or 13%, from the previous year, and exceeding projections by 3%. Of this total, $790 million, or 23.6%, came from Act 52-2022 payments by foreign entities.
Sales and Use Tax (IVU in Spanish) revenue totaled $2.9 billion, up $201 million from the prior year, surpassing projections by 11%.
Individual tax revenue, however, saw a decline of $268 million, mainly due to the distribution of the Refundable Incentive during the fiscal year. An additional $250 million adjustment was approved in the last two months of the fiscal year through Joint Resolution 606-24.
Year-end performance
Pérez-Méndez said that for June 2024 alone, preliminary general fund net revenue reached $1.48 billion, exceeding projections by $50 million, or 3%.
Corporate tax revenue for the month was $654.5 million, 28% higher than the previous year, with $290 million generated from Act 52-2022 payments.
This figure meets revenue expectations and confirms the prediction that the largest number of estimated corporate income tax payments under the new Act 52-22 regime would be made by the end of the fiscal year, as the law allows taxpayers to make their payments in April or combine both quarterly payments in June.
“This figure meets the collection expectations and confirms what we anticipated about receiving the largest amount of estimated income tax payments under the new regime of Act 52-22 at the end of the fiscal year, given that the law grants the taxpayer the prerogative to make the payment in April or make the two quarterly payments together in June,” Treasury stated in its news release.
IVU revenues for June totaled $348.9 million, a 15% increase from the same month last year, which totaled $302.7 million.
Individual tax revenues, however, fell by $132.4 million, primarily due to the distribution of the Refundable Incentive in May and June.
