Last month’s Sales and Use Tax revenue, which includes transactions made in August, totaled $124.2 million, the highest level for a month of September since the SUT was implemented in November 2006, the Treasury Department said Wednesday.
August’s numbers were positively affected by a new SUT implemented at the island’s ports, the agency said.
However, Treasury Secretary Melba Acosta-Febo said the total will be reduced by $4.7 million in ACH transactions that were processed but were returned for different reasons, which brings the number down to $119.5 million.
The Treasury Department has already identified the nearly 50 merchants whose ACH transactions were returned and will follow up to collect them, she said. Some $115.7 million of these funds were already transferred to the Puerto Rico Sales Tax Financing Corp (known as COFINA), the rest will be transferred this month, she further noted.
“If we compare what was already transferred to COFINA, $115.7 million, with September 2013 SUT revenues, we see an increase of $9.1 million, or 8.5 percent. SUT revenues for the first quarter of Fiscal 2015 (July to September) totaled $337.8 million, for a $17.3 million, or 5.4 percent increase compared to the same period in Fiscal 2014,” she noted.
Acosta-Febo said the “positive results are even stronger given certain setbacks with the initial implementation of the Integrated Merchant Portal (PICO, by its Spanish acronym) system [at the ports] and with the filing of electronic returns under the new system.”
She attributed the strong results to the Treasury Department’s “ongoing efforts to increase collections, tackle tax evasion and enforce tax compliance through the collection of the SUT at the island’s ports.”
“As we have mentioned before, the company in charge of creating and programing PICO was initially unable to make it work up to the standards for merchants’ ease of access and use that we had demanded,” she said. “Most of the complications that occurred have been addressed at this point, though the Treasury Department did not stop collecting the SUT — as has been mistakenly said — due to these technical complications. Rather, [Treasury] implemented mechanisms and processes so to ensure revenue capture would continue, and today we see the results.”
“As the system is further refined, we expect even greater growth in SUT collections during the coming months,” she said.
To deal with the system’s issues, Treasury established alternate filing methods — including allowing merchants to temporarily file monthly SUT returns in paper form — and made due dates more flexible. Still, she admitted that the volume of paper returns was low despite the problems since the inception of the system.
“As of today, only 660 paper returns have been filed. 3,215 SUT returns for imported goods and 44,557 regular SUT returns were electronically filed through PICO. There are 52,981 users registered in PICO,” she said.
Meanwhile, Acosta-Febo further explained that the most recent revenue collections are allocated to COFINA for debt service.
“In Fiscal 2015, COFINA will receive the first $670 million collected in SUT revenues to service the debt, a 4 percent increase over last year’s payment of $643.7 million to COFINA. In the first quarter of Fiscal 2014, 47.4 percent of this payment had been transferred to COFINA, while 50.4 percent has already been transferred in the first quarter of FY2015. The revenue increase we are announcing today has resulted in higher allocations to COFINA and a higher relative share of revenue already transferred,” she explained.