PR tax haul misses mark through 1Q - Caribbean Business

Puerto Rico’s tax revenue was up 4 percent during the first quarter of fiscal 2015 (July-September) but missed estimates by $36.4 million, the Treasury Department reported Thursday. Total general fund revenue for the three-month period was $1.1774 billion, $75 million more than collected during the first quarter of fiscal 2014. September general fund revenues totaled $709 million, about $46 million short of the estimate of $755 million for the month. Puerto Rico’s tax haul has now missed targets in two of three months in fiscal 2015, having also come up short by $27.4 million in August. The latest tax numbers came out as Puerto Rico prepares to place as $1.2 billion in tax revenue anticipation notes (TRANs) through a law enacted Tuesday by Gov. Alejandro García Padilla. The short-term notes, which will mature in June 2015, are expected to carry a coupon of 7.75 percent. A sale of TRANs would mark Puerto Rico’s first debt deal since passage of the Recovery Act, legislation enacted by García Padilla this summer that allows public corporations to restructure their debts through a bankruptcy like process in island courts. The law spurred a flood of credit downgrades by Moody’s Investors Service, Fitch Ratings and Standard & Poor’s, further limiting the commonwealth’s access to the $3.7 trillion municipal bond market. Puerto Rico, which is dragging around more than $70 billion in debt, issued $3.5 billion in junk rated general obligation bonds in March. That sale was aimed mostly at raising short-term liquidity. September collections were driven by individual income tax collections of $168 million, which is a $22 million, or 15.3 percent, increase over last year. September revenues registered the largest monthly increase during the quarter. Collections of the 6 percent state sales & use tax (IVU) totaled $115.7 million, the highest monthly level for a month of September since the SUT was implemented in November 2006. Corporate income tax collections totaled $225 million in September. This amount was $25 million below September 2013 collections and $27 million below estimates for the month. However, most corporations made larger payments this fiscal year, which the Treasury Department said “demonstrates the diversity of the corporate sector’s tax behavior.” Some 3,456 corporations were identified as making estimated tax payments in the total amount of $183 million, which represents $57 million, or 45 percent, above payments in September 2013. Foreign corporation excise tax (Act 154) collections showed a $10 million decline to $139.4 million in September, leaving it $15.6 million short of estimates. Nevertheless, revenues in this category were up by $93 million this quarter when compared with the same quarter last year and were $43 million over estimates. Other excise taxes categories registered fluctuations. The motor vehicles excise tax showed a $4.3 million reduction year-over-year; this decrease was smaller than in July and August. Meanwhile, alcoholic beverage collections showed a year-over-year increase of $4.3 million, or 22.3 percent. There were also reductions in the excise tax on off-shore shipments of rum for the month and the quarter when compared with prior year periods. These reductions are due in part to the decline in the reimbursement per gallon of rum to $10.50 compared to $13.25 last year as extender legislation was allowed to lapse in Congress. “It is expected that during this fiscal year, as in previous years, a tax extender will be approved retroactively and this excise tax reimbursement will be $13.25 per gallon,” Acosta said. Acosta said the Treasury Department continues implementing several oversight efforts and initiatives to generate revenues for the general fund.

PR tax haul misses mark through 1Q