Underground businesses under siege

In increased efforts to replenish depleting coffers and safeguard public safety, the government has stepped up moves against businesses in the CNMI that are operating without proper permit from the commerce department.

The move came after Commonwealth Development Authority Chair John S. Tenorio disclosed that unlicensed businesses in the Northern Marianas are causing the government millions of dollars in uncollected taxes.

Mr. Tenorio pointed out that the government is likely to see more revenues filling up the public coffers had there been strict monitoring and documentation of all business transactions in the islands.

Businesses operating without the necessary permit from the government make up the so-called underground economy which, he said, is detrimental to revenue collection efforts of the government.

“One major factor that causes the downfall of the CNMI economy is the underground economy. Underground economy refers to business transactions that are not reaching government taxation and there’s a lot of them,” Mr. Tenorio stressed.

He also claimed that most of those unlicensed businesses which have flooded the Northern Marianas are the same employers who retain overstaying nonresident workers.

A pending legislation which seeks to impose stiffer penalties against business operators who continue to violate revenue and taxation laws, as well as unfair business policies will address some major concerns.

Gov. Pedro P. Tenorio said investigations are already underway to identify businesses operating without proper permits and licenses as he stressed that the government will penalize those without registration.

“We have started checking some premises to make sure that vendors have a license because if they didn’t, there would be specific penalties that will be hurled against them,” Gov. Tenorio said.

Last year, the Department of Commerce deployed a Compliance Task Force to conduct inspections of roadside vendors over reports that too many businesses are in illegal operations.

Latest inspection conducted by DOC’s Alcoholic Beverage Control revealed that about half of the vendors examined were in violation of the law by not having proper business license or selling prohibited items.

The inspection was initially aimed at reminding the vendors to rectify the problems and making them obliged to register to the commerce department.