The Treasury Department collected around $150 million via electronic payments during the final stretch to file income tax returns from individuals and corporations.
Its a preliminary figure similar to what was recorded last year at the close of the tax period. The figure, however, does not include payments made by checks or the tax debt carried over by those who filed their returns but differed their payment.
With this revenue, the Treasury seeks to maintain a positive balance in the governments accounts that, for this fiscal year, have seen collections that exceed the projections contained in the budget by $180 million. This increase is due, in part, because for this fiscal year the Treasury adjusted its forecasts to make estimates more conservative. This helped mitigate the government’s trend in overestimating its estimates and overdraw on expenditures.
Added to these revenues at the Treasury are payments made by workers and corporations during the tax year. The figures of the agency, up to February, pointed to the government having perceived $1,127 million from workers. This means $60 million less than what was projected and $89 million less than the previous year.
Roxana Cruz, undersecretary of the Treasury, said, however, that the agency’s perception is that the positive pace of collections during the income tax return filing period will continue once the accounting process and analysis of the tax documents is completed. She explained that the amount of documents filed, to reconcile the tax burdens for 2016, is similar to that reported in previous years, which hints to believing that the variations should not differ significantly when the process is completed.
Her arguments take into consideration that, last night, the Treasury’s electronic filing system crashed at times due to user overload, thereby limiting the number of tax returns that went into the system.
This situation prompted Treasury secretary, Raúl Maldonado, to extend until midnight yesterday the deadline to file the returns, without incurring in fines or penalties.
“We had such a high volume of filings that we started to see many system messages because it slowed due to the high flow of incoming returns,” explained Cruz in an interview with El Nuevo Día.
System slows down. When reacting to this situation, certified public accountant, Kenneth Rivera, explained yesterday that the system seemed “blocked” when transmitting the electronic document.
“It’s not that the system crashed. It actually seemed to become slow and unable to properly receive the returns, but if one kept trying the return would finally go through... Before, that problem used to be solved by printing the return and taking it to the Treasury, but now the system is electronic,” said Rivera.
That was the second setback the Treasury experienced during the tax period. In March, part of its virtual system was attacked by hackers, which rendered it practically inoperative for several weeks.
The electronic system, however, has helped significantly in the oversight of taxes over revenues, as it facilitates comparing the taxpayer’s information with the files that employers submit to the agency, Cruz explained.
The Treasury also saves the costs associated with entering the taxpayers’ information into the data bases, while users have greater flexibility to manage their taxes as they can fulfill their responsibility without the need for further formalities accounting offices or the government, said Cruz.
“Now what we want to include is more forms and more services in the electronic platform for taxpayers,” said the undersecretary of the Treasury.
Currently, electronic income tax return filing is compulsory for individuals, save for some exceptions specified by the Treasury.
Also, the electronic system, in theory, simplifies the processes in such a way that it makes it easier for the agency to be more agile in managing the refunds taxpayers receive for any excess payment on their income taxes. In fact, according to Cruz, by Tuesday, some $30 millions worth of refunds had already been made. Normally, the Treasury creates a reserve to refund the money to taxpayers. This year, this fund is supposed to have about $320 million, according to agency documents. However, because of the government’s liquidity problems, this figure does not mean the Treasury has all that cash.
Yesterday, the Treasury could not say how much cash was in its accounts. Cruz indicated, however, that the level ensured the government’s operations until new reserves are generate to comply with the impositions by the Oversight Board (OB), an entity created by the US Congress to control the finances of Puerto Rico.
Maldonado has said that the main goal is to gather $200 million as a reserve fund and maintain a cash flow so that by June 30 it may top $290 million. In this way, the corrective actions as previously detailed by the OB to reduce the government’s expenses would be avoided. Specifically, the threat that a 20% reduction in the work day be decreed for public employees and that Christmas bonuses be eliminated.
These cutbacks seek to contain the fiscal abysses the government faces for the next fiscal year that starts July 1.
Specifically, the pension system for central government workers and the teachers runs out of funds to pay retirees so that the government will have to come up with $989 million to cover those expenditures. Likewise, the Mi Salud program faces deficiencies of about $600 due to the depletion of funds from Obamacare.
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