DPW urged to enforce 2% developer’s tax on Tinian

Tinian and Aguiguan Mayor Edwin P. Aldan is urging the Department of Public Works to take immediate steps to assess and enforce the developer’s tax on all relevant construction projects on Tinian.

In a letter to DPW Secretary Ray Yumul dated yesterday, Nov. 21, Aldan highlighted the importance of enforcing the developer’s tax, a 2% levy on construction projects related to military developments on Tinian, mandated by CNMI law.

“I am writing to bring to your attention the critical need to assess and enforce the developer’s tax, as mandated by CNMI law, on construction projects related to military developments on Tinian. This tax, which imposes a 2% levy on developers, represents a significant source of revenue that our municipality must capitalize on to address pressing infrastructure needs,” wrote Aldan.

Yumul confirmed receipt of Aldan’s letter and said he’s cognizant of his concerns.

“I did have conversations with Mayor Aldan on multiple occasions regarding this. I told him that I would look into the matter,” he told Saipan Tribune.

Aldan mentioned in his letter that the revenue from this tax is crucial for addressing infrastructure needs on Tinian, especially given the significant military activity and construction projects taking place.

“The developers’ tax, set at 2%, is designed to be collected on the cost of development projects, contributing to the funding of public infrastructure and improvements that are necessary to support the growth and changes brought by such developments. As you are aware, Tinian is currently experiencing considerable military activity, including projects such as the Divert Airfield at West Field and the proposed Commonwealth Joint Military Training activities. These projects involve extensive construction efforts, impacting our island’s infrastructure and resources.”

According to Aldan, despite these projects’ large scale and cost, the municipality has not yet benefited from the tax revenue.

“Despite the immense scale of these military construction activities, our municipality has yet to benefit from the developer’s tax revenue. The Divert Airfield project alone, involving the construction of critical facilities and infrastructure upgrades, represents a multi-million-dollar investment. Additionally, the proposed CJMT project will bring even more significant developments. Based on preliminary cost estimates, the total expense of these military construction projects is projected to reach hundreds of millions of dollars. Assessing a 2% tax on these expenditures could yield substantial revenue for Tinian.”

Furthermore, he wrote that enforcing the collection of this tax is essential to generating the revenue needed for maintaining and upgrading roadways, enhancing water resource systems, and supporting the demands placed on the island’s infrastructure.

“It is imperative that we enforce the collection of this tax from contractors engaged in these military construction projects. The revenues generated are urgently needed to address our island’s infrastructure challenges, particularly in maintaining and upgrading our roadways and enhancing our water resource systems. As Tinian continues to be a focal point for strategic military initiatives, our community must have the means to support the demands placed on our infrastructure and ensure the well-being of our residents.”