Treasury collects $626.5M in July, fueled by SUT revenue
The Puerto Rico Treasury Department announced Friday that General Fund net revenues totaled $626.5 million in July 2015 — the first month of Fiscal 2016 — representing a $2.3 million increase when compared to July 2014.
Collections were $21.1 million above estimates, Treasury Secretary Juan Zaragoza said.
Sales and Use Tax (SUT) collections totaled $154.3 million in July 2015, a $40.6 million, or 35.7 percent, year-over-year increase and the highest amount of revenues for any month since the inception of the SUT. Imports and retail sales corresponding to the month of June drove July’s SUT revenues, which were at the 6.0 percent rate, he said.
A per Puerto Rico regulations, bonded importers have until the 10th day, and merchants have until the 20th day of the month following the taxable month to make SUT payments.
“As a result, the commercial transactions of June were paid in July. The SUT rate increase went into effect on July 1, 2015; therefore, collections under the new rate will be reflected in August, except for SUT paid by non-bonded importers who paid the new 10.5 percent rate when they picked up goods at the ports in July. The SUT paid in July at the new rate totaled $21.6 million,” he said.
He attributed the increase in SUT revenues in July to — among other factors — the implementation of the last phase of the Integrated Merchant Portal (PICO, by its Spanish acronym), which was completed May 1st and involved the integration of non-bonded importers to the PICO system’s process of declaring and paying the SUT for imported merchandise at the ports.
“Another factor that may have influenced collections is the effect of consumers making purchases in advance of the rate increase,” he said, adding “as a result of Treasury’s debt collection efforts, certain settlements were reached with several high volume retailers in July. These collection efforts will continue during the coming months.”
COFINA funds transferred
The $154.3 million SUT collected in July 2015 were distributed as follows: $142.7 million to the Puerto Rico Sales Tax Financing Corp. (known as COFINA for its initials in Spanish), to cover debt service, and $11.3 million to the General Fund.
The base amount allocated to COFINA increases each fiscal year at a rate of 4 percent, which this fiscal year is $26.8 million more than last fiscal year, for a total base amount of $696.3 million. The July 2015 allocation to COFINA was $29 million above the July 2014 allocation, which was $113.7 million. Seventeen percent (17 percent) of the total base amount for Fiscal 2015 was deposited in July 2014, compared to 20.5 percent of the total base amount for Fiscal 2016 deposited in July 2015, the agency explained.
The government collected $27 million in connection with a tax amnesty that ended June 30, 2015, attributed to certain transactions that took place on the last day of June and were deposited on the next working day, and were credited in July. Tax amnesty revenues correspond mainly to individual and corporate income taxes — collections totaled $111 million, with $84 million collected in Fiscal 2015.
In the main revenue categories, individual income taxes and non-resident withholdings reflected increases associated with an increase in tax amnesty payments, while corporate income taxes reflected a slight decrease, which the agency attributed to a lower payment by an undisclosed company that made a non-recurring significant payment last year.
The foreign excise tax was the main revenue driver, with $258.9 million, or 41.3 percent of total collections in July 2015; in the year-over-year comparison this category reflected a decrease as a result of the specific effect of one transaction by one corporation. Other excise taxes showed mixed results: alcoholic beverages collections were up and cigarette and motor vehicle revenues were down. Motor vehicle excise tax revenues were $21.4 million; however, $20 million was transferred to the Green Energy Fund, in accordance with the law.
Motor vehicles excise tax revenues were $21.4 million. However, $15 million of that amount was transferred to the Green Energy Fund and $5 million to the Legal Responsibility Fund, as established by law.