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Last updated: 04 May, 2006 - Published 19:50 GMT
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Puerto Rico to resolve its fiscal crisis
Puerto Rican flag
Proudly displaying the Puerto Rican flag
Puerto Rico moved a step closer to resolving a partial government shutdown when the island's Senate voted to impose a 5.9 percent sales tax and a new levy on large corporations.

The fifteen to ten Senate vote had the key support of opposition lawmakers. It's not clear however, when the House of Representatives will take up the proposal.

The vote came on the fourth day of a shutdown that has closed Puerto Rico's public schools and put more than ninety thousand government employees out of work.

Opposition lawmakers have been resisting Governor Anibal Acevedo Vila's proposed sales tax of seven percent that he said was necessary to obtain a loan to pay government salaries for the remainder of the fiscal year.

New tax on corporations

The just approved Senate measure includes a new tax on corporations with earnings of more than ten million dollars.

The governor had said previously that he would oppose the additional levy.

But he agreed to support it amid public protests over the government shutdown.

Governor Vila has also indicated that he would agree to the 5.9 percent sales tax voted on by the Senate.

Fiscal problems

The Puerto Rican government ran out of money last Monday, two months before the end of the fiscal year.

The governor and the opposition-dominated legislature have tried to find a negotiated settlement but have mainly ended up trading insults and accusations as the crisis escalated.

The shutdown forced the closure of 43 public agencies.

Thousands of government workers have since been applying for public assistance.

The Puerto Rican government has an estimated 740 million dollar shortfall in public funds.

Last week tens of thousands of Puerto Ricans took to the streets to demand that the politicians reach an agreement.

The government is the biggest employer in Puerto Rico, accounting for up to 200,000 jobs.

It pays about 500 million dollars in salaries.

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