Monday, February 22, 2016
GDB: JANUARY REVENUES BELOW ESTIMATES
Government Development Bank
February 19, 2016
PUERTO RICO TREASURY REPORTS GENERAL FUND NET REVENUES
TOTALED $670.8 MILLION IN JANUARY 2016, $28.7 MILLION BELOW
JANUARY 2015, $59.4 MILLION BELOW REVISED ESTIMATES AND
$162.4 MILLION BELOW ORIGINAL ESTIMATES
Sales and Use Tax collections totaled $247.2 million, a $105.1 million y-o-y
increase (San Juan, Puerto Rico) – Treasury Secretary Juan Zaragoza Gómez,
reported net revenues recorded by the General Fund in January 2016 totaled
$670.8 million, a $28.7 million decrease compared to January 2015. This di-
fference can mainly be attributed to $62.2 million of nonrecurring revenues
from January 2015 that were associated with Act 77-2014, which granted a
temporary period during which certain transactions, such as those involving
Individual Retirement Accounts (IRAs), retirement plans and other capital a-
ssets, could be prepaid at preferential rates. January revenues showed a $162.
4 million reduction compared to original budget estimates. The difference com-
pared to revised estimates is $59.4 million. The categories of individual inco-
me tax, non-resident withholdings and foreign corporations registered the most
significant changes. Individual income taxes registered a $57.1 million year-
over-year decrease. $35.2 million of this reduction can be attributed to non-re-
curring revenues from last year’s tax pre-payment alternatives.
In addition, employers’ withholdings were down by $11 million in January 2016,
causing monthly revenues to be below estimates. In contrast, corporate income
taxes registered an increase of $94.8 million. Revenues from non-resident with-
holdings, a category mainly associated with royalties from the use of manufact-
uring patents, were $102.7 million below January 2015 revenues and $16.4 mi-
llion below revised estimates. This decrease is due, in part, to the fact that a pay-
ment that was received in January last year, is expected to be received in March
this year. This category registers atypical monthly changes because it mainly de-
pends on corporate tax planning.
Foreign excise tax collections showed a $16.9 million decrease compared to revi-
sed estimates. This difference can mainly be attributed to decreased sales reported
by two corporations, one of which reported that it expects to recover part of its sales
in the coming months. January 2016 Sales and Use Tax (SUT) receipts totaled $247.
2 million, approximately $105.1 million above January 2015 receipts. This differen-
ce is the result of the increase in the state SUT rate to 10.5% from 6%, and the 4%
tax on designated business-to-business and professional services (known as B2B).
B2B collections were $11.4 million in January and $26.4 million since its imple-
mentation in October 2015. SUT revenues were allocated as follows: $7.6 million to
COFINA, which completed the remainder of the $696.3 million transfer to COFINA
for this fiscal year; $69.2 million, or 0.5%, to the Municipal Administration Fund;
$1.9 million to the Film Industry Fund; and $168.5 million to the General Fund.
Zaragoza Gómez also reported that fiscal year-to-date (July-January) SUT collec-
tions totaled approximately $1.36 billion, compared to $832.0 million in the same
period of FY 2015, representing a $525.9 million increase. Motor vehicle excise
taxes registered a decrease of less than $1 million. Even though revenues from the
total number of unitswere down, revenues from high-end motor vehicles were up.
Fiscal year-to-date revenues totaled approximately $4.57 billion, a year-over-year
increase of $111.6 million or 2.5%, $59.4 below revised estimates and $183.8 mi-
llion below estimates included in the original $9.8 billion budget for FY 2016.