Late last month Puerto Rica lawmakers approved a bill to increase sales tax. The approved bill will increase sales tax to 11.5 percent from the previous 7 percent, excluding certain processed foods. A new 4% tax will also be added on professional services.
The unincorporated American territory has been facing steady downhill recession for approximately 8 years. Speculation the island wont be able to pay off its dept on time has caused fluctuating distress levels. Since 2006, the struggling island has nearly doubled the national’s average unemployment rate.
Starting July 1, 2015 the tax increase will begin and the new tax will go into affect as of October 1,2015. By April 1, 2016, it will become a value-added tax.
Economic woes have caused heavy emigration from the island. Nearly seven percent of its population have moved inland. Senator Migdalia Padilla said the tax hike might push more residents to leave the island.
Puerto Rico does not need to apply more pressure on its inhabitants but work to increase economic growth and lower migration.
Compared to any state, Puerto Rico will have the highest sales tax.
The tax will help generate $1.2 billion dollars in revenue to pay off a $72 billion dollar public dept.
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