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Sunday, April 20, 2014

Extension looms for tax amnesty

Gov. Eloy S. Inos said yesterday that the tax amnesty that ran for only about three weeks until it expired on Jan. 2 is on its way to being extended, and House Ways and Means Committee chair Tony Sablan (Ind-Saipan) is now drafting an amendment bill.

Sablan, author of the revenue-generating bill that became law, said the three-week window for the just concluded tax amnesty program was “too short” to be able to prepare and submit all required tax documents and other papers to support the application.

He said the proposed extension could be for “two to three months.”

“We don’t want to cut it short because doing so will defeat the purpose of extending it,” Sablan said. But he is concerned that any extension could interfere with the April 15 tax filing deadline.

The governor said many of those who were able to apply for tax amnesty within the limited period were either missing or submitted incorrect documents, and the law didn’t give flexibility for Finance to be able to accept the correct or more documents after the Jan. 2 deadline.

Sablan said the amendment bill would allow those filers to come back and refile their application, and those who will come in for the first time.

Like the governor, Sablan believes that if only the tax amnesty period is extended, the government would be able to tap more taxpayers who want to settle their tax arrears without being penalized.

“The number is there, we just need to tap it,” Sablan said, reiterating that tax amnesty is one of the most effective ways to generate additional revenue during difficult times without raising taxes.

Under the tax amnesty program, taxpayers may request for the waiver of penalty and interest imposed on late-filed returns, under-reported income, and delinquent tax liabilities.

The governor signed the tax amnesty bill into Public Law 18-29 on Dec. 4. However, it wasn’t only until Dec. 13 that a special return and a request for waiver form became available at the Division of Revenue and Taxation for those who wanted to avail of the tax amnesty. This further shrunk the time period for the program.

Finance Secretary Larrisa Larson separately said yesterday they might have preliminary figures on the tax amnesty by next week.

This is only the third time that the CNMI government has offered a tax amnesty.

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