Tax Evasion in Puerto Rico

in Business Risk

Economics and tax officials in Puerto Rico estimate that the territory fails to collected an estimate $800 Million in tax revenue from due to unreported income each year.

The island currently has a 7 percent sales tax that residents avoid through the use of cash transactions.

According to data from the US Treasury, over 80 percent of self-employed people in Puerto Rico claim on taxes that they earn less than

$15,000 per year. 69 percent of sole business proprietors report earnings that are below $11,000 a year.

37 percent of corporations report losses.

In total, financial intelligence officials estimate that the underground economy (excluding drug trafficking and criminal activities) in Puerto Rico is worth $16 Billion.

(Key statistics about money laundering.)

Source:  Associated Press, “Puerto Rico fights tax evasion as it seeks new revenue sources,” Star Tribune, March 8, 2015.

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