House Judiciary and Government Operations Committee chair Rep. Christopher Leon Guerrero (Cov-Saipan) pre-filed on Friday a bill increasing the penalties on businesses that fail to issue sales receipts, and the new fines go up to $1,500 compared to the current fines reaching only up to $1,000.
House Bill 18-132, however, removes jail time for erring businesses.
Leon Guerrero said revenue loss resulting from a lack of enforcement of laws is significant, and dishonest businesses are able to take advantage of laws that are too complicated to enforce.
“Currently, dishonest business operators find that it is profitable to ignore the Sales Receipts Act. To reduce their taxes, they purposely fail to produce the necessary business record of the transactions. The resulting loss to the CNMI coffers is conservatively estimated to be in the thousands of dollars per quarter,” Leon Guerrero said.
The bill clarifies the process by which violators can be cited and penalized.
“The criminal aspect wherein violators may serve up to one year in jail time was removed and replaced with a higher civil fine. It should also be clear that the Secretary of Finance or her designee can issue citations to enforce the regulations relating to this law. The amendment clarified this already existing authority,” Leon Guerrero said in his bill.
Currently, the fines for not issuing receipts range from zero to $1,000.
The new fines are $250 for the first offense, $750 for the second offense, and $1,500 for the third offense.
The third offense will trigger an automatic revocation of the business license for six months.
The bill also clarifies that Finance is allowed to issue cease-and-desist orders that are effective even before an administrative hearing is conducted.
Business operators who violate the law by failing to obtain a valid business license should not be able to avail of the same protections that are provided to those who do hold valid licenses.
Leon Guerrero’s bill also says that 75 percent of the penalties will be used to fund the enforcement of the measure once it’s signed into law. This earmark will cover the potential for investigations, administrative hearings and other due process measures.
The rest will be deposited like other civil penalties into the general fund, wherein it can be used to provide critical government services.