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Number Of Local Millionaires On The Rise
Puerto Rico Treasury Department statistics reveal grew from 32 to 169 between 1992 and 1998
by IVONNE GARCIA
July 27, 2000
If you think youve seen more people out there with fatter purse strings, youre right on the money.
The number of individuals reporting taxable income of $1 million or more in Puerto Rico more than quintupledfrom 32 in 1992 to 169 in 1998according to Treasury Department statistics revealed last week.
"This reflects that there are more millionaires than before," said Treasury Secretary Xenia Velez in an exclusive interview with CARIBBEAN BUSINESS.
The number of people reporting taxable income of $150,000 or more also grew almost five fold from 928 in 1992 to 4,477 in 1998. Those making between 90,000 and 100,000 almost tripled from 1,090 in 1992 to 3,160 in 1998, and the number of people reporting taxable income between 100,000 and 150,000 tripled from 2,045 in 1992 to 6,377 in 1998, according to Treasury statistics.
"People are making more money and more people are reporting what theyre making," said Velez.
Its nothing new that there are people in Puerto Rico making oodles of money, but what has changed is that theyre telling the truth about it, the Treasury head said.
"When tax rates are confiscatory, theres a greater incentive to evade paying taxes," she said. "When you lower tax rates you make it cheaper to comply, but then you have to increase the costs of non-compliance."
The Treasury chief believes this hike in people reporting income is owed to the policies of the Rossello administration, which have included significant tax cuts for individuals and corporations, coupled with what she described as increased scrutiny and auditing of tax returns.
"We have a three-pronged approach: greater scrutiny, reduction of tax evasion rates, and increased revenue for the people," said Velez, adding that this is part of the governments formula to promote "economic development and greater quality of life."
As of this year, the Rossello administration has implemented $2.447 billion in tax benefits for individuals, and $1.191 billion for economic sectors. Meanwhile, the tax evasion rate has decreased from 34% in 1980 to 16% in 1997, according to Treasury numbers.
"People who are making more money save more and invest more," Velez said. "The more money there is to save, the greater economic activity you can promote."
The agencys aim, she said, is to promote local savings and investments, which in turn spur economic development. "Thats how we get capital for greater economic activity that generates added value. What we want to promote is activities that generate added value, because thats what fuels economic growth."
This Caribbean Business article appears courtesy of Casiano Communications.