Loi 117-2006 : Justice fiscale et taxe sur les ventes et l’usage (IVU)

On July 4, 2006, Act No. 117 — the Tax Justice Act of 2006 — was approved, amending the 1994 Internal Revenue Code to implant a broad-based Sales and Use Tax (IVU) and replace the general excise, while keeping separate excises on cigarettes, gasoline and other fuels, vehicles and alcoholic beverages.

The statement of motives frames shifting the burden (less income tax, more consumption tax), broadening the taxpayer base — including the informal economy, then estimated at about $1.6 billion — and cutting individual income-tax rates for tax years beginning after December 31, 2006. It incorporates a work credit analogous to the federal Earned Income Tax Credit, a compensatory credit for low-resource pensioners, and measures against the “marriage penalty,” with expanded deductions for dependent care and education.

The text links IVU collections to the Fund for the operational budget deficit in accordance with Act 91 of May 13, 2006 (FIA / vehicle later associated with COFINA). It also warns that the measure alone does not end fiscal troubles and requires an Executive fiscal reform to cut spending. IVU exemptions are limited, among others, to prescription medicines, manufacturing raw materials, exports and PREPA fuels.

Legislative approval ≠ realized collection estimate or end of the structural deficit. Cousin: 665 (Act 91-2006 COFINA/FIA). Primary: Act 117-2006 (LexJuris PDF; law date 2006-07-04).

Source: LexJuris (Ley 117-2006). https://www.lexjuris.com/lexlex/leyes2006/lexl2006117.pdf