Puerto Rico Gov. Alejandro García Padilla and legislative leaders have reached a new tax deal.
On Wednesday, Treasury Secretary Melba Acosta scaled back the amount of revenue expected from a proposed business-to-business sales tax. Instead, the government will introduce a tax on business sales volume and increase a business profit tax, Acosta told The Bond Buyer.
Instead of the $1.1 billion initially projected by the new business-to-business sales tax, it is now expected to bring in $287 million. It will apply to a small group of industries.
The new tax on business sales volume is projected to bring in $522 million. Only businesses with more than $1 million in annual sales would pay this tax.
A raise in taxes on corporate profits would yield $270 million, which would raise that tax rate to levels last seen in 1994. The new top rate will rise to 39% from 30%.
Those three tax prongs are expected to bring in $1.079 billion, or roughly the same as the old business-to-business sales tax was expected to yield.
Including other changes to the tax code, García Padilla is projecting $2 billion more in government revenue in the coming fiscal year.
Expenditures in fiscal 2014 are projected at $9.83 billion.
The leaders of the Puerto Rico House and Senate said they expected to approve the budget in the week of June 17.
The budget is due to be passed by the legislature and signed by the governor by June 30. The new fiscal year starts July 1.