The Department of Finance has made significant collections during the end of the second quarter of Fiscal Year 2024, closing the projected 22% shortfall of $17 million to only 5%, or $4.1 million.

In Finance’s quarterly financial report for the second quarter of FY 2024 submitted to the Legislature on Wednesday, Finance Secretary Tracy B. Norita said as of March 31, 2024 (year to date), the cumulative gross collections equaled $78,538,571 as compared to forecast of $82,679,442 resulting in a cumulative shortfall of $4,140,871, or 5% of total revenue prior to transfers out.

Norita also disclosed that as of March 31, 2024, they paid $17 million of the NMI Settlement Fund Minimum Annual Payment (MAP).

Since 2014, pursuant to a settlement agreement between the CNMI government and retirees, the CNMI government has been making a 25% voluntary benefit payment to the NMI Settlement Fund on top of the court-mandated 75% MAP.

Norita said although a shortfall of $4.1 million in collections remains, the continued increase in tourist arrivals, with February 2024 arrivals above 50% and March 2024 above 30%, coupled with the modest recovery of local economic activity, has contributed to overall 2nd quarter collections.

Additionally, the secretary said, the continuing efforts of the Tax Collection Taskforce and the newly launched Division of Revenue and Taxation’s Revenue Management & Information System (RMIS), has strengthened Finance’s enforcement capabilities, exceeding collections in the Income Taxes category for the quarter by 15% or $3.4 million, inclusive of Business Gross Revenue Tax (BGRT) collections, and increasing penalty and interest collections by over $560,000 for the quarter alone.

Norita said with a total collection amounting to $78.5 million prior to transfers out less earmarks, the identified budgetary resources of $75.8 million as compared to forecast of $80.3 million, resulted in a cumulative shortfall of $4,561,817, or 6%.

For income taxes, Finance exceeded its cumulative revenue forecast by 8%, inclusive of 1st quarter and 2nd quarter that is mainly contributed from the BGRT collections.

In addition, Finance noted a significant jump in collections of penalties and interest from delinquent taxes due to the efforts of its collection task force team in collecting prior years unpaid taxes; forecasted penalties and interest $210,422, and actual collection was $890,000.

For Hotel Occupancy Tax (HOT), Norita said the forecast was exceeded by 18% and non-aviation fuel by 42%.

However, Norita said, the increase in taxes was offset by the overall revenue shortfall of collections in the other tax areas such as the excise taxes, resulting to an overall revenue shortfall in the other taxes of 32%.

For Amusement Machine Licenses (poker machines and electronic gaming machines), Finance exceeded its revenue forecast by 52%, by collecting $3,978,543 compared to forecasted $2,621,813.

On comparison of actual expenditures and appropriated expenditures, Norita said the allotments of $398,856 for the Health Network Program were fully disbursed to the Commonwealth Healthcare Corp. for 1st quarter and 2nd quarter.

She said the total cumulative payments of $7,867,217 were made to the Public School System for the 1st quarter and 2nd quarter allotments.

Norita said cumulative payments to the NMI Settlement Fund amounting to $6,340,425 were disbursed to pay the retirees’ 25% pension as of March 31, 2024.

She said the total disaster/typhoon expenditures amounted to $414,524.

On earmark transfers-out, Norita said a total of $1,516,830, or 80% of HOT for the special earmark, has been disbursed to the Marianas Visitors Authority’s Trust Fund.

Tracy B. Norita