Puerto Rico Gov. Alejandro García Padilla, looking to bolster the U.S. territory’s fiscal position after a series of ratings downgrades, proposed an an operating budget for the coming fiscal year with 8.3% more spending and a 16% increase in revenue.
A central component of García Padilla’s expectations of higher operating budget revenues is a 191% increase in sales tax revenues to $1.607 billion in fiscal 2014. In a speech Thursday night, he said he plans to eliminate exemptions, including reseller’s exemption certificates that allow purchasers to avoid taxes on goods they plan to sell, a program he says is subject to widespread fraud. The governor proposes to replace the certificates with tax credits. The budget would also restore and extend a 4% tax on the operations of multinational firms, resulting in the second biggest increase in tax revenues to the general fund, $317 million.