Puerto Rico's tax collection gap narrows in October -Treasury

Puerto Rico's Treasury tax collections were a touch above estimates in October, slightly narrowing the struggling U.S commonwealth's year-to-date tax collection gap, according to a report from Puerto Rico's Treasury on Wednesday.

Tax collections totaled $676 million in October, $7 million above official estimates. That narrowed the gap between year-to-date actual revenues and estimates to $29 million, or 1.2 percent, from $36 million, or 2 percent in September.

Debt-laden Puerto Rico passed its first balanced budget in years for the current financial year and any slip in tax revenue could jeopardize that goal. Puerto Rico has been in or near recession for the last 8 years.

The main driver of collections in October was individual income tax revenue, which totaled $259 million, a year-over-year increase of $100 million, the Treasury said.

Increased collections in income tax were due to rules that established a temporary period for some taxpayers to prepay tax on individual retirement accounts and other assets at a reduced rate. Revenues from these transactions totaled $103 million in October, the Treasury said.

Despite beating forecasts, revenues in October fell by 21 percent, or $195.6 million, compared to October last year. The Treasury attributed the decline to $237 million in non-recurring revenues in corporate income tax and non-resident withholdings in October 2013. (Reporting by Edward Krudy; Editing by James Dalgleish and Meredith Mazzilli)

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Puerto Rico's tax collection gap narrows in October -Treasury