Loto is proposed to increase collection of sales tax
March 04, 2010 - Category: IVU- Sales Tax

IVU-Loto launch planned for second half of 2010
Treasury secretary says proposal would bring additional $400 million by second year

An IVU-Loto that allows $1,000 drawings twice a week based on numbers printed on purchase receipts and the daily transmission of retail transactions would begin by the last quarter of this year, according to a plan advanced by Treasury Secretary Juan Carlos Puig.

The aim of the IVU-Loto is to curb evasion of the sales & use tax (IVU by its Spanish acronym) and bring in an additional $400 million to the government coffers after its second year of implementation, Puig explained.

He recalled that the Puerto Rico Certified Public Accountants Association issued a report last year on a study revealing that the collection and submission rate for the IVU was only 52%, leaving an evasion rate of 48%, much of which involves businesses that charge the IVU but don’t send the collections to the Treasury Department.

In the next few days, the Treasury Department (Hacienda by its Spanish name) will issue a request for proposals (RFP) to implement the IVU-Loto, Puig said.

“We are aiming to issue the RFP early in March. We project it will be implemented in the fourth quarter of the year, at least in its initial phase,” he added.

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