HANMI awaits regulations on hotel tax incentive

Effects of the tax incentives offered by CNMI government on development and expansion of facilities will be seen only after the Commonwealth Development Authority release the implementing guidelines for the qualifying certificates.

Hotel Association spokesperson Lynn Knight disclosed that a good number of infrastructure projects will be coming out but members are still awaiting for the implementation of another program that would give them tax incentives.

Ms. Knight explained some hotel owners have already signified intentions to renovate some of their facilities but the recently-signed Public Law 12-32 encompasses only new facilities and does not cover renovations.

She said the Legislature has drafted another bill which will handle renovation issues and tax rebates. Unless this bill passes both houses, HANMI will only benefit from the existing law if new structures will be constructed.

“Renovations are not covered; only extensions. Hotel owners are waiting until the regulations come out, whether they will include renovations or not, only then that HANMI will act on it,” Ms. Knight disclosed.

Under HB 12-233 cited as the Tourist Related Tax Incentive Act of 2000, tax incentives will be provided to businessmen engaged in promotions, expansions, renovations, and many other projects that will compliment the CNMI’s desire to attract tourists.

The tax incentives provided under the said Act will be the basis and the foundation for the necessary strengthening of the tourism industry in the Northern Marianas.

The proposal include renovation and expansion of existing hotel, upgrading of an existing establishment of facility, and promotion of tourism which include advertising, public relations, marketing of overseas sales trips, trade shows, and other tourist related similar activities.

Ms. Knight explained that if the regulations that will be released by CDA on the Qualifying Tax Certificates will not cover renovations, HANMI members will press for the immediate passage of HB 12-233.

The government is currently taking every possible measure to revive the tourism industry in the Commonwealth, which suffered a deep slump beginning 1998 when major Asian economies collapsed due to the increased value of dollar against their currencies.

The construction business was also devastated by the economic upheavals which resulted to numerous delayed projects and the closure of several companies.

Contractors on the island expressed optimism that with the tax incentives offered currently by the government, businesses will again improve including the development of additional structures which will bankroll several investment programs. (EGA)