Saying that a tax amnesty program is the “most cost-effective” way for the government to collect tax revenue during difficult economic times and one that is “better than writing off” debts to the government, Rep. Tony Sablan (IR-Saipan) and three other House members are pushing for an amnesty period that will be in effect until Jan. 1, 2017.
Sablan, in an interview yesterday, said he considers this tax amnesty proposal a “revenue-generating bill.”
“We're not trying to increase taxes, but we want a program in place wherein Finance can work with individuals owing prior taxes from prior years and see what they can do to entice these people to come forward and work out payment schedules so we can start collecting,” Sablan told Saipan Tribune.
Press secretary Angel Demapan said last night that the administration “will need to examine the merits of this bill in order to quantify the success of the previous rounds of amnesty and the CNMI's ability to do another round of the program.”
In the last few years, the Fitial administration had been saying it does not plan to implement a tax amnesty similar to those in 2001 and 2005.
Sablan said once the measure is formally introduced today, the movers will work closely with the Division of Revenue and Taxation to see whether they can estimate the amount that can be generated by this proposed third amnesty program. The last time it was done was during the administration of former governor Juan N. Babauta.
“I believe this is better than writing off debts to the government. I believe this is one way to try to bring in money without having to raise taxes,” Sablan said.
Three other House members are sponsoring the proposal, including Vice Speaker Frank Dela Cruz (IR-Saipan).
The government has “at least” $12 million to $30 million in uncollected taxes based on the Executive Branch's previous statements to the media.
Sablan said the previous program was highly successful, although he said not all eligible persons and entities took advantage of the law, Public Law 14-28. The first one was implemented through Public Law 12-51.
A former immigration director, Sablan said many delinquent taxpayers would welcome another opportunity to pay their taxes under an amnesty law.
If and when such new proposal becomes law, taxpayers will be allowed to pay their delinquent taxes without penalties and interest, with certain exceptions.
Sablan's proposal also waives the penalty for failure to obtain a business license.
Covered under the proposal are all taxes, including withholding taxes and all returns, including deductions, exemptions, credits erroneously claimed in returns filed for all tax years prior to calendar year 2013.
These include taxes for wages, salary or earnings; gross revenue tax; room, bar and jackpot tax; excise tax; and income and/or tax pursuant to NMTIT.
There are exceptions, however. Exempted is any person against whom a criminal or civil action has been initiated and is pending for any violation of the tax laws of the CNMI or any person being investigated for fraud; any person convicted of tax fraud; any person whose source of income is illegal; and any person who fraudulently files a special return under this Act.