Puerto Rico Gov. Alejandro García Padilla plans to propose tax increases as part of the fiscal 2013-2014 budget.
Earlier this week, Deputy Finance Minister Pedro Cintron told a legislative Finance Committee that García Padilla was planning to include new taxes in the fiscal 2013-2014 budget.
This winter, the Puerto Rican government projected a $2.16 billion structural operating deficit in the current fiscal year, barring corrective action. This would amount to 22% of spending.
Secretary of the Treasury Melba Acosta Febo told The Bond Buyer that the tax increases would mainly close gaps in corporate income taxes.
For example, new taxes would address money transfers between company branches that put Puerto Rico subsidiaries into loss positions. Currently, they would not pay Puerto Rico taxes. With the new taxes, they would have to pay taxes to Puerto Rico.
Acosta Febo also said the administration was planning to expand the amount of sales and use tax revenue received. This would be by eliminating several exemptions and closing sales tax loopholes.
"The measures are currently being drafted and will be incorporated as part of the 2013-2014 budget to help us achieve a balanced budget as soon as possible," Acosta Febo said.
The government is also introducing measures to address the current fiscal year's deficit. The Puerto Rico House of Representatives recently approved a tax amnesty to promote the payment of unpaid taxes, including sales taxes, income taxes and other taxes, Acosta Febo said.
