Photo: Puerto Rico's Treasury Department (Keno Rodríguez)
Puerto Rico’s treasury department is issuing tax refund checks that are not backed by sufficient funds, an opposition lawmaker said Tuesday.
Antonio Silva told radio stations that he had received complaints from taxpayers who tell him that they have not been able to cash their refund checks.
The lawmaker specifically cited branches of Banco Popular, saying that they had refused to accept the treasury department’s checks, supposedly due to lack of funds.
Silva, also said that he is ready to provide the names of the managers of the bank branches where the problem has surfaced and he challenged the government to refute the complaints.
The treasury secretary, Melba Acosta, on Tuesday acknowledged that the Puerto Rican government has cash-flow problems, but she denied that the situation has affected any tax refunds.
Acosta said that the situation had occurred specifically with customers of Banco Popular.
The problem, she said, is that the 2009-2013 administration of Gov. Luis Fortuño declined to continue an arrangement with Banco Popular whereby the island’s government guaranteed checks issued by the treasury department.
Banco Popular is asking its customers to deposit the refund checks in their accounts and allow the funds to be reflected on their bank balances a few days later, Acosta said.
The secretary said that about $30 million is paid every week in refunds and she asked Silva to explain what the problem is.
The controversy comes at a difficult time for Puerto Rico’s public accounts, given that the island has been in a recession for more than five years.
Rating agencies Fitch, Standard & Poor’s and Moody’s have recently downgraded Puerto Rican government debt to BBB-, one level above junk status.