An administration-sponsored bill pre-filed yesterday levies a new “fat” tax of 5 percent on at least 30 consumer goods, including betel nuts, candies, chocolates, ice cream and edible ice, chewing tobacco, cigarettes, malt beer, wine, soft drinks, cooking oil, and peanut butter and paste.
House Bill 17-320 or the Health Care Impact Tax Act seeks to achieve two goals: Help the Commonwealth Healthcare Corp. pay off a $4.58 million debt to the Marianas Public Land Trust, and “combat the growing problem of obesity” in the CNMI.
Vice speaker Felicidad Ogumoro (Cov-Saipan), in her bill, said the measure will ensure that CHC meets its obligations to MPLT by assessing a “special health care impact tax on unhealthy items including certain foodstuff and tobacco products.”
“The tax assessed in this section shall be collected by the Division of Customs at the point of entry,” Ogumoro's bill reads.
Richard Pierce, executive director of the Saipan Chamber of Commerce, said yesterday that as a rule, the Chamber would oppose any increase in taxation or any tax that leads to an increase in consumer pricing.
“SCC will review the bill to assess its impact as well as how the tax is delivered,” he said.
The Saipan Chamber of Commerce is the largest business organization in the CNMI with over 150 members.
A male Garapan resident said last night that while he supports the promotion of a healthy lifestyle, he doesn't support the idea of ordinary citizens paying for the debts of CHC or the hospital. A mother working on Capital Hill separately shared the same sentiment.
Any added tax would mean consumers would have to pay more for items assessed a “fat” tax.
CHC is in deep financial trouble, and needs every financial help it could get, including proposed appropriation from the Legislature, loans and line of credit, and a proposal to increase hospital fees by up to 300 percent.
Under HB 17-320, a health care tax “at the rate of 5 percent ad valorem” will be imposed on 30 items.
These include animal and vegetable fats; betel nuts/leaves/limes; beer made from malt; candied nuts; candies; canned and prepared meat; chewing tobacco; chips and similar crisp savory snack foods; chocolate and other food products containing chocolate; cigarettes; cigars, cheroots and cigarillos; cocoa butter, fat and oil; cocoa shells, husks, skins and other cocoa; coconut (copra) oil and its fractions; distilled alcohol; ice cream and edible ice; lard; and liquors and cordials.
Completing the list are margarine, excluding liquid margarine; salad and cooking oil; oil and fats of animals and its fraction; peanut butter and paste; salt and sodium forms; soft drinks (Bibs syrup); soft drinks (carbonated/non-carbonated); soybean oil and its fractions; tobacco; vegetable oil; and wine.
In September, then acting governor Eloy S. Inos announced the government's plan to impose a so-called “sweet” tax, but this became a “fat” tax. At the time, the administration did not have a percentage rate yet.
Ogumoro's pre-filed bill is expected to be introduced during the next House session.