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‘Eliminate grace period for importer to pay excise tax’
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Posted on Feb 11 2020
The CNMI is the only member of the Oceania Customs Organization that offers a grace period for an importer to pay their excise tax, according to CNMI Customs director Jose C. Mafnas, who supports the idea of eliminating this.
At the House’s session Friday, Mafnas urged House members to pass House Bill 21-104 that would eliminate the 30-day grace period within which to pay the excise tax on good that require Customs inspection and clearance.
Mafnas said he strongly believes that the legislation is a win-win proposition for all—the CNMI government and Customs as the protector of the CNMI borders, importers, and the entire community.
House floor leader Rep. John Paul P. Sablan (R-Saipan) pre-filed House Bill 21-104.
Mafnas said that Finance Secretary David DLG Atalig has asked him to convey his endorsement of the bill.
The Customs director said he has been advocating for an amendment of the taxing provision, particularly the excise tax part. He said the CNMI is the only member of the Oceania Customs Organization that offers a grace period for import tax, as all OCO members impose a “pay upon clearance” requirement.
Mafnas said the “pay upon clearance” will lessen arrears and Customs will stop sending out billings or going after delinquent taxpayers to resolve their account.
“It takes a lot of efforts to collect outstanding payments on our assigned officers,” said the director, adding that the legislation will cure this issue.
Mafnas said the “pay upon clearance” will also increase revenue for the CNMI government as all dutiable imported goods will be paid immediately. “There is no option for an importer to ignore their payment obligation,” he said.
Mafnas added that the “pay upon clearance” will allow Customs officers to focus on protecting CNMI borders from the infiltration of harmful goods.
He said Customs continues to face a lot of challenges with drug smuggling, undervaluation of goods, undeclared of high tax-rate commodities, and other contrabands like fake products and banned hazardous chemicals.
“House Bill 21-104 will lessen these challenges,” Mafnas said.
