NMI seeks return of $160M

The CNMI government is looking at the possibility of collecting over $160 million in what it terms as “cover over”—a form of federal tax paid to the U.S. government that needs to be returned to the Commonwealth.

Sources at the Treasury Department disclosed yesterday that negotiation is now ongoing between the U.S. administration and the Commonwealth government for the expeditious recovery of the said amount owed by the U.S. to the CNMI.

Sources said that under existing laws, the U.S. government should return to the CNMI those taxes paid to the federal government by certain employees and businesses based in the Commonwealth. That money, which the local government now estimates at $160 million plus, had not been returned to the Northern Marianas for several years, the source added.

“That is the case. The money should be turned over but for sometime, the money was not returned,” the source said.

The official explained that the CNMI is entitled to the money and this is what prompted the CNMI government to begin negotiations on how to collect on this significant amount.

According to the official, certain individuals and companies had paid the U.S. government taxes and other charges imposed on them and this has been going on for several years now.

However, if the law is applied, the U.S. government should have been remitting the said monies back to the CNMI’s coffer. This has not happened.

After the CNMI government found out about it, an immediate discussion was held, but sources said that Gov. Juan N. Babauta was and is not directly involved in the ongoing negotiation. The source did not specify as to when the CNMI government found out about this.

Babauta had disclosed Monday that his visit to Washington D.C. this week would include a possible meeting to discuss the “cover-over” issue with U.S. Cabinet members.

“We are arranging a series of meeting with members of the U.S. Congress and the administration and Cabinet members to tackle issues affecting the CNMI. We would discuss with them the taxes claimed by federal government, which should be returned to us. I cannot speak more about that. It is being worked on right now,” said the governor in an earlier interview.

Babauta is leaving on May 30 to hold a series of discussion with members of the U.S. Congress and the Bush administration. Topping his agenda for the trip is the discussion on the stateless bill to be sponsored by U.S. Rep. Dan Burton, chairman of the U.S. House Committee on Governor Reforms–Subcommittee on wellness and human rights.