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House leadership pursuing a flat tax system
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Posted on Feb 01 2005
The House leadership is pursuing the implementation of a flat tax system in the CNMI as embodied in a legislative proposal.
House Speaker Benigno R. Fitial, according to his spokesman Charles Reyes Jr., will hold a meeting this week on the issue.
“This [flat tax] is continually being discussed. This is being refined, fine-tuned,” said Reyes.
Last year, Fitial formed a task force composed of government and private tax experts to look at the possible implementation of a flat tax system in the Commonwealth.
This cam about after House Ways and Means Committee chair Norman S. Palacios introduced House Bill 14-203, which aims to reform the Commonwealth tax system by adopting a flat tax system.
The bill aims to simplify the tax system and repeal wage and salary tax and earnings tax by enacting a Commonwealth flat tax of 10 percent based on total income from sources within the CNMI.
The bill also aims to require a deduction for all premiums paid for the purchase of health insurance by self-employed individuals and employees whose employers do not provide or are not responsible for medical costs.
The proposed measure provides exemptions for dependents and child support from taxable income and housing exemption to self-employed people.
Among the initial members of the task force were Tax and Revenue director Esther Ada-Calvo, consultant Rufino Inos, Marian Aldan-Pierce of Duty Free Shop, private attorney Rex Cosack, Eloy Inos of Tan Holdings Corp., and representatives from Deloitte and Touche.
The House minority, meantime, has expressed caution on the proposal, citing the lack of a study.
“There’s no finding as of now. Normally, if you submit something, there should be some finding,” said minority bloc spokesman Rep. Ray Tebuteb.
He said that, while the bill cites good points for an improved taxation system, “the other side must be looked at as well.”
“It’s safe to go slow and make sure we see both sides because if you say it’s good, it may not be good for others,” said Tebuteb.
