For the first time in the current fiscal year, Puerto Rico’s General Fund net revenues through January exceeded those of the previous fiscal year, despite COVID-19’s impact.
Net revenues were up by 1.3% from the start of the fiscal 2021 in July through January of this year compared to a year earlier according to the Puerto Rico Treasury Department, with $842.9 million collected in January 2021 alone. Through January collections were 21.6% above projections for the period.
While this fiscal year's collections have been hampered by the island’s strict COVID restrictions on businesses and residents, those of July 2019 to January 2020 were not. Despite these restrictions since the onslaught of COVID, revenues came in higher this fiscal year.
Puerto Rico central government bondholders have pointed to Puerto Rico’s repeated outperformance of the projections of the Puerto Rico Oversight Board as reasons to see the board’s fiscal plan revenue projections going out as far as 30 years as likely being too pessimistic.
Collections have exceeded the corresponding month in the preceding year since November.
“The revenues for January reached the figure of $842.9 million, while the collections during the same period in 2020, totaled $734.7 million,” said Treasury Department Secretary Francisco Parés Alicea. “The amount collected in the main tax lines, with the exception of taxes on [alcoholic] beverages and tobacco products, exceeded what was entered in January 2020.”
From July through January net General Fund revenues were $6.033 billion. The categories with the biggest collections were sales and use taxes with $1.235 billion, individual income taxes with $1.224 billion, and corporate income taxes with $1.155 billion.
In the period the tax categories that exceeded their projected amounts by the biggest amounts were the “other” category with $467 million, corporate income taxes by $235 million, and the motor vehicle category by $177 million. The only categories that came in short were taxes on non-residential people ($59 million) and the Law 154 excise tax on foreign corporations ($24 million).
Parés Alicea said the strong individual income and sales and use tax revenue performances were the result of federal assistance programs, some of them connected to COVID-19.
Through January compared to the prior fiscal year, individual income taxes were up 7.3%, corporate income taxes were up 34.6%, alcoholic beverage taxes were up 5.2%, cigarette taxes were up 26.3%, motor vehicle taxes were up 25.2%, foreign entity excise taxes were down 9.6%, and sales and use taxes were up 26%.
Parés Alicea said $488 million of the $1.155 billion collected in corporate income taxes through January were non-recurring contributions that should not be expected to repeat in future fiscal years.
