February 10, 2014 / 3:15 PM / 5 years ago

Puerto Rico revenue dips in Jan, sales tax collection a record

NEW YORK, Feb 10 (Reuters) - Puerto Rico took in revenue of $664 million last month, $1 million less than in January 2013, while sales tax collection hit a record high, preliminary data from the island’s Treasury showed on Monday.

The U.S. commonwealth, which had its credit rating cut to junk-bond status last week by Standard & Poor’s and Moody’s, has some $70 billion of tax-free debt outstanding and is struggling to overcome a chronic recession and a fast declining population.

The Treasury said in a statement that through January it had collected $4.6 billion in revenue since the current fiscal year began in July, a 13 percent jump over the same period last year.

Revenue from its sales and use tax swelled to $129.9 million last month, the highest level for any month since the tax was implemented in November, 2006.

January collections were used to complete a $643.7 million payment for so-called COFINA bonds, which are backed by tax revenues. Unlike Puerto Rico’s general obligation debt, the COFINA bonds still carry investment grade ratings.

“We continue to see the positive results of new tax legislation and administrative efforts as we implement our fiscal and economic development plans and work toward a balanced budget,” said Melba Acosta Febo, the island’s Treasury secretary.

The government has said it aims to balance the budget for fiscal year 2015. After the S&P downgrade last week, Governor Alejandro Garcia Padilla said he would cut the current fiscal year deficit by $170 million.

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