This year, Puerto Rican taxpayers have filed approximately 100,000 additional tax returns forms, compared to the previous year. This proves a growing sense of responsibility among many taxpayers and the potential to increase Treasure revenues on the island.
The Treasury Department reported the number of taxpayers who met the requirement to file their tax returns for last year´s income. According to official data, by press time, 750,000 taxpayers have filed their returns online and they were expected to reach 900,000.
These numbers speak of citizens committed to the present and future of Puerto Rico. The labor and tax participation of these hundreds of thousands of workers is a bet that, with the necessary adjustments in public structures, our island can overcome its great challenges.
With an estimate of $400 million more than projected, the government expected yesterday to close the fiscal year with $200 million above the fiscal plan projections.
This scenario imposes on the government a greater responsibility with its constituents.
It demands prudence and accountability. The government must return this contribution with better services and with the necessary steps to consolidate a socioeconomic infrastructure that boosts job creation. These should generate more economic activity and, then, more revenues to help balance public coffers.
The data also reveal that the Treasury is showing a better capacity to attract revenue which is partly supported by a fast return process. By Monday, they had already returned $160 million, which is a fair act to recognize those who met the deadline. According to the Treasury Department, 15,000 taxpayers have requested extensions.
Having an efficient tax system becomes even more relevant in these times of fiscal austerity when the island´s multimillion-dollar debt is still under Federal Court consideration through PROMESA Title III.
The government must return this effort by taxpayers with efficient public services through an effective government structure without unnecessary redundancies.
The government has already implemented some changes in its effort to provide Puerto Rico with resources to reach fiscal balance, to recover its credibility and its credit capacity to move the economic needle.
However, it still remains to generate, with the participation of all sectors, a comprehensive and lasting tax reform that would simplify and proportionally distribute the tax burden to facilitate the development of a competitive, economically and socially sustainable Puerto Rico.
The tax system and its individual and corporate incentives require evidence-based metrics and justifications. They must respond to the reality and the demographic and economic projections of the island. They must also be effective in eliminating tax evasion, not only on income but also on consumption.
This will represent justice to responsible taxpayers and contribute to the budgetary balance that is necessary for the debt restructuring process and to return to capital markets. They are also a driver for long-term economic growth.
It is also essential to shape to a broad and comprehensive vision of the island that will lead to a series of critical reforms, including the tax and energy reforms. These reforms will lay the ground for other urgent policies aimed at reactivating the economy, building equity and social justice.
An efficient tax system is the best incentive for citizens and businesses to comply with their duties and obligations.