Gov't losing $5-M from underground businesses
The CNMI government is losing about $5 million in annual taxes from the illegal operation of businesses without proper permit from the business licensing office of the finance department and the alcoholic beverage and tobacco control division of the Department of Commerce.
The amount lost each year could be enough to fund the need for more public school teachers or improve school facilities. It is also more than enough to send more local students to college through government scholarship programs.
Development Authority Board Chair John S. Tenorio pointed out the possibility that some establishments which did not renew business license may have actually remained in operation.
A Quarterly Economic Review report from the Department of Commerce disclosed that more than 2,500 establishments in the Northern Marianas did not renew their business licenses last year.
According to Mr. Tenorio, the apparent dislocation of too many businesses last year warrants government attention as he added that an inspection of those establishments may prove that they actually remain in business minus the proper permits.
“These underground businesses don’t pay fees for business licenses. In addition, they also don’t pay annual taxes which may actually be causing the government between $2 million and $5 million each year,” he said in an interview.
Mr. Tenorio explained that existing laws require any company to secure permit for every business activity undertaken in the CNMI, which means one firm can actually hold more than one license.
In fact, taxi operators have to get permit from both the Taxicab Bureau of the Department of Commerce and the Business Licensing Office of the finance department. This is exclusive of the professional driving license which they should secure from the Motor Vehicle Bureau of the Department of Public Safety.
If it is serious in its efforts to replenish depleting government coffers and safeguard public safety, Mr. Tenorio said the finance and commerce departments should step up moves to combat the continued operation of unlicensed businesses in the islands.
The government is likely to see more revenues filling up public coffers had there been strict monitoring and documentation of all business transactions in the Northern Marianas.
“We have to identify and single out establishments which continue to sell alcoholic beverage and tobacco without permit from the ABTC, or unlicensed taxi operators whose units continue to ply Saipan routes,” Mr. Tenorio said.
The Tenorio Administration has taken a strong stand against underground businesses with the deployment of government inspectors to carry out sting operations initially on establishments selling alcoholic beverages and alcohol without permit from the commerce department.
Gov. Pedro P. Tenorio has disclosed that the government have started checking some premises to make sure that vendors have a license as he stressed that undocumented establishments will be meted out with stiff penalties.
Inspectors from the Compliance Task Force were mobilized last year to conduct random inspections of roadside and stationed vendors over reports that too many establishments are doing business without permits.
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.
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 is now pending before the CNMI Legislature.
