Puerto Rico’s House approves oil excise tax
SAN JUAN, Puerto Rico (AP) — Puerto Rico’s House of Representatives on Tuesday approved a bill that would increase the excise tax on a barrel of crude oil by 68 percent.
The Senate planned to debate the measure late Tuesday. If approved by the upper house, the measure will take effect next March.
Approval by the lower house came two days after Gov. Alejandro Garcia Padilla announced that legislators had reached a consensus on the measure. Garcia has said that public transportation in the U.S. territory will be paralyzed if the bill isn’t approved because the island’s Highway and Transportation Authority is struggling financially.
The proposed increase from $9.25 to $15.50 tax per barrel is expected to generate about $178 million a year.
Supporters say the tax increase is needed to help sell up to $2.9 billion in bonds and strengthen the finances of the Highway and Transportation Authority, which owes $2.2 billion to Puerto Rico’s Government Development Bank, about 21 percent of the bank’s portfolio. Additional revenue generated by the proposed increase also would help refinance at least $1 billion in loans made to the Highway and Transportation Authority.