Puerto Rico's July General Fund tax revenues came in 3.5% higher than budgeted.
July's sales and use tax collections were also 35.7% greater than those for July 2014, according to a written statement from the Puerto Rico Treasury Department.
The General Fund received $626.5 million, $21.1 million more than the government's projection, according to the Treasury. The sales and use tax gave $11.6 million to the General Fund in the month and $142.7 million to the Puerto Rico Sales Tax Financing Corp. (COFINA), which pays off its COFINA bonds.
The biggest revenue exceedances from budget projections came from individual income taxes, $7.2 million over projections, foreign corporation (Act 154) excise taxes, which came in $4.6 million ahead, and alcoholic beverage taxes, at $4.5 million above projections. The biggest shortfall was for motor vehicle taxes, at $2.7 million.
While the sales and use tax rose to 11.5% on July 1 from 7% in June, this only contributed about $8 million directly to the sales and use tax revenue increase of $40.6 million in July compared to one year earlier, according to Treasury. Companies and merchants usually have until the 10th or 20th day of the following month to contribute their sales tax revenues and they generally exploit these delays.
The sales tax rise may have contributed indirectly by spurring consumers to make purchases in advance of the rate increase in June, Puerto Rico Treasury Secretary Juan Zaragoza G-mez said. These June sales and use tax proceeds were handed to the government in July.
The government's completion in May of the last phase of an Integrated Merchant Portal collection of sales and use taxes at ports also contributed to the improvement in these tax collections, he said.
Finally, the government also reached settlements for back sales and use taxes owed with several large retailers in July.
"These collection efforts will continue during the coming months," the Treasury said.
In other revenue-related news, a government study group has recommended going ahead with converting the island's sales and use tax to a value added tax on April 1.
A sales tax is only charged by retailers while value added taxes are charged all along the supply chain. In its collection of the sales and use tax on imported goods at its ports, the commonwealth sales and use tax already has elements of a value added tax.
In order to gain votes from some members of his own party in the Puerto Rico House of Representatives, Gov. Alejandro García Padilla agreed to set up a government committee to study various forms the island's consumer tax could take.
The Committee on Alternatives to Transform the Consumption Tax released its report Thursday recommending the VAT. The report considered and rejected a transformation of the consumer taxes to taxes focused exclusively on import taxes at ports.
The government has already approved a tax on business-to-business services that is scheduled to start Oct. 1.
