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House sets public hearing for wider tax exemptions
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Posted on May 27 1999
A public hearing will be conducted next month by the House Ways and Means Committee on a proposed legislation that will grant up to 100 percent tax exemptions to businesses which meet certain criteria to be imposed by the government.
Committee chair Rep. Karl T. Reyes said it is likely that they will support the measure along with the creation of the proposed free trade zone in the Northern Marianas that also offers a package of incentives to investors.
The views of the business community as well as the island residents will be considered by the committee when they make recommendation to the House to pass the twin measures.
Both bills are intended as last-ditch attempt by the CNMI government to attract foreign investments as well as to broaden the economic base of the island whose tourism and garment industries have been impacted by the region-wide recession in Asia.
Called the Qualifying Tax Certificate Program, the proposal is offered by Rep. Heinz Hofschneider in efforts to assist the private sector in dealing with the current economic crisis confronting the Commonwealth.
Its tax structure is similar to the proposed legislation establishing the free trade zone, although its rebates and abatements of up to 100 percent are greater in value.
What sets its apart from the other measure is the requirement that businesses must employ 40 percent of its work force from local resident and that they should provide training to the indigenous people if they want to avail of the incentives.
The free trade zone does not set the same restriction, although the bill sponsored by House Speaker Diego T. Benavente will require investors in the special economic site to offer training to the local labor pool.
Hofschneider’s bill has drawn the backing of the Department of Commerce which hailed its requirement of 40 percent local employment and job training for residents.
“We hope that businesses and the public will provide inputs on whether they also support (those criteria),” Reyes said in an interview.
The hearing is set for June 17 at the Multi-Purpose Building in Susupe.
