June 12, 2013 / 6:16 PM / 6 years ago

Puerto Rico policymakers strike key budget deal

SAN JUAN, June 12 (Reuters) - Puerto Rico policymakers have agreed to hike taxes by $1.5 billion as part of a budget which is closely watched by U.S. credit-ratings agencies weighing downgrades of the Caribbean island’s massive debts to junk-bond status.

Puerto Rico Treasury Melba Acosta told local media on Wednesday that the fiscal 2014 operating budget would sharply reduce a $1.1 billion proposal by Governor Alejandro Garcia Padilla to broaden a sales tax and instead would rely on an island-wide levy on gross sales by businesses and increases in corporate taxes.

Facing a June 30 deadline to enact a spending plan for the 12 months starting July 1, the leaders of the legislature said they expected to pass the governor’s revised $9.83 billion budget as early as next week.

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