SAN JUAN, Puerto Rico – Puerto Rico's governor has unveiled details of his plan to overhaul the island's tax system, including the creation of a new 16 percent value-added tax.
Gov. Alejandro Garcia Padilla said Tuesday in a pre-recorded televised message that he would file the measure Wednesday as he seeks to generate more government revenue amid an eight-year recession.
He did not disclose the amount of the value-added tax, but an official who was not authorized to speak publicly on the matter said it is 16 percent.
If approved, the new overhaul would eliminate the sales-and-use tax and a gross receipts tax in favor of the value-added tax.
Puerto Rico currently takes in 56 percent of tax revenues that it should be collecting and loses about $800 million annually as a result.