Treasury reports $1.3B in April revenue, is short $97M
The Puerto Rico Treasury Department revealed Monday that it shored up more than $1.3 billion in revenue for the government, but admitted it fell short by $97 million compared to estimates.
Treasury Secretary Juan Zaragoza-Gómez attributed the decrease to lower corporate income taxes, which were $142 million below estimates, due to the elimination of the gross receipts tax (known in Spanish as “patente nacional”) provision of Act 238-2014, in preparation for the approval of the tax reform. Conversely, April revenue from individual income taxes was up by $23 million from last year.
In general, April totals were up a $152 million, or 12.9 percent, increase compared to April 2014. Historically, this is the highest amount of revenues for the month of April, second only to April 2011, he said.
The Treasury Secretary attributes the increase in revenues to the positive effects of the implementation of Act 44-2015 on March 30, 2015. This act allowed the pre-payment of a special tax on certain transactions through April 30, 2015.
These transactions included: a pre-payment, at a reduced rate of 5 percent or 8 percent, of taxes on corporate dividends for future distributions of accrued benefits and profits, and a window to pre-pay IRAs and Educational Contribution Accounts. Revenues in this category were $150 million in April, with $116 million coming from taxes on dividends.
The law extends the period to take advantage of an incentive plan to pay debts for income, estate, gift, excise, and sales and use taxes, as well as employer withholdings, to June 30, 2015. In addition, the mandate establishes an incentive plan for the voluntary disclosure of income, and payment of the corresponding taxes; and a pre-payment, at a reduced rate of 8 percent, of taxes on corporate dividends for future distributions of accrued benefits and profits.
Zaragoza-Gómez said revenues from all these measures, through June 30, 2015, are estimated to be $160 million. He expects collections in this category to exceed estimates, since April collections were in the amount of $150 million.
Meanwhile, he confirmed that the 6 percent state portion of the sales and use tax rose to $120 million in April, a 4.2 percent year-over-year increase.
Total tax revenues were distributed as follows: 0.5 percent, or $10 million, was transferred to the Municipal Administration Fund, $270,000 to the Film, Arts, Sciences and Industry Development Corporation, with the General Fund receiving $109.8 million after those adjustments were made.
The 6 percent state portion of the fiscal year-to-date sales and use tax revenue totaled $1.1 billion. After adjusting last year’s revenue for comparison purposes, this category reflects a $56 million, or 5 percent, increase.
The foreign corporation excise tax (Act 154) was up $34.5 million, or 20.7 percent, from last year. For the third consecutive month, revenues in this category were above $200 million, Zaragoza-Gómez pointed out.
Lastly, the government official announced that Fiscal 2015 year-to-date revenues totaled $7.3 billion, up $62 million year-over-year, and $251 million below estimates.
Zaragoza-Gómez expects the incentives to pay debts and other administrative measures will help reduce this gap.