Puerto Rico relaunches VAT at 11.5% for 2016
- May 15, 2015 | Richard Asquith
The government of Puerto Rico has reached a new compromise in an attempt to reverse the decision to abandon the implementation of VAT.
The introduction of VAT is seen as a key reform as the country struggles to bring its deficit and debt levels under control.
The new plan will include an increase in the existing sales and use tax from 7% to 11.5%. There will also be a 4% tax on B2B transactions. The replacement Value Added Tax regime will be introduced at the start of 2016. This new rate will only raise $1.2 billion in revenues compared to the originally planned rate of 16% which would have raised $1.5 billion.
It is hoped that the new planned will be passed by the parliament before the end of May.