Counting our blessings? Commonwealth tax reform - five years later. (CB Analysis) (Column)

Nearly five years after enactment of Puerto Rico's 1987 tax reform, the results speak for themselves. Income tax collections from individuals and companies, which, when combined, constitute almost 60% of the government's tax revenues, have risen by more than expected under the reform, thus refuting the naysayers who felt that a sharp drop in tax rates would lead to a decline in collections.

But the good news on that front comes with bad news on tax evasion and excise taxes, as highlighted by the current controversy surrounding the higher excise taxes being imposed arbitrarily by the Puerto Rico Treasury Department (Hacienda). Interest group politicking during the reform process, along with lack of follow-through at Hacienda on seeking …