The government of Puerto Rico released an administrative order Tuesday suspending some $1.8 billion in special assignments and tax credits, in an attempt to bridge budgetary gaps.
Administration officials issued the executive order through the Fiscal Agency and Financial Advisory Authority (FAFAA) to address shortcomings identified between audited financial reports for Fiscal 2014 and the projections for Fiscal 2017 contained in the Fiscal Plan presented to the Financial Oversight and Management Board for Puerto Rico.
“The goal is to comply with the assigned budget for Fiscal 2017,” said Elías Sánchez, the governor’s representative at the Board during a news conference Tuesday. “The executive order addresses the historical problem in which the government has been unable to implement a balanced budget.”
The government is suspending special multiannual assignments included in prior budgets as well as freezing tax credits that have not yet been approved and establishes the capacity of limiting their validity for a maximum of four years.
The order also establishes the Authorization Committee for Disbursements and Tax Concessions to implement a process to evaluate and approve applications to incur in the expenses and use credits, Sánchez explained.
The committee is comprised by FAFAA, the Treasury Department and the Office of Management and Budget.
At present, there are some $140 million in tax credits that the Treasury Department will review to determine which ones benefit the island’s economy the most. The surviving credits will be paid out in four years instead of in a one-time annual payment.
The executive order will affect tax credits granted through more than a dozen laws affecting tourism, infrastructure and housing, tourism developments and the film industry.