House passes bill to impose tax increase on construction activities

The House of Representatives passed on Friday a bill that seeks to impose an additional 3% tax on the yearly gross revenue of construction activities in excess of $250,000.

With 16 House members voting “yes” and only Rep. Thomas John Dela Cruz Manglona (R-Saipan) voting “no” during a session, House Bill 23-74, House Draft 1, passed the lower chamber and now goes to the Senate for action.

Before the voting, House Speaker Edmund S. Villagomez (Ind-Saipan) initially announced that he is going to refer the bill back to the Ways and Means Committee because Rep. Ralph N. Yumul, who is the main author of the legislation and chairs the committee, is apparently not ready to move it.

During a recess, Yumul stated that he did speak with the Senate counterpart and they’re (senators) not ready to move with the bill because of some comments from the Saipan Chamber of Commerce about the bill that need to be addressed.

When the session was back, floor leader Rep. Edwin K. Propst (D-Saipan) withdrew his earlier motion to pass the bill and moved to recommit the legislation back to the Ways and Means Committee.

The motion to recommit the bill back to the Ways and Means Committee, however, was defeated, 12-5, and the bill was back on calendar.

During another recess, Rep. John Paul P. Sablan (Ind-Saipan) said they discussed this legislation in the conference committee and that he is surprised that Yumul is saying now that the senators are backing out.

“This is part of the critical discussion that we spoke about, that we vote out from the House all these tax bills for them for action. I’m a bit surprised that they’re now saying the opposite,” Sablan said.

Yumul said they have some response from the Saipan Chamber of Commerce opposing it and that he also got a verbal communication that the Office of the Delegate also opposed it.

“’I’m not sure, I may stand corrected on that because of how the bill was written. So that’s why I’m holding it,” Yumul said.

He said now if the House members disagree, they can vote it out and send it to the Senate and let them decide.

Yumul said he stands by his legislation and respects everybody’s vote and decision.

Rep. Blas Jonathan T. Attao (Ind-Saipan) said they spoke about this bill since earlier last year.

“The importance of this legislation is not at tomorrow. It was yesterday. Because the tax period happens in January,” Attao said.

He said the reason why they agreed to the 3% tax even during the conference committee is to allow the beneficiaries of Tinian and Rota districts to impose an additional 2% tax in all the projects that are happening within their senatorial districts, that they can create some local revenues within their senatorial districts.

“So, I don’t understand why now the Senate’s position might be to hold on tax legislation. As a matter of fact, there’s a few tax legislations that are sitting in the Senate right now that they could act on. Unfortunately, they chose not to,” Attao said.

He said that doesn’t mean that the House should wait for the Senate to take action on certain legislations.

“So, let’s move on. I think it’s been here for far too long,” Attao said.

Reps. Vicente C. Camacho (D-Saipan) and Vincent Seman Aldan (Ind-Saipan) raised some questions about the bill. Attao and some House members answered them.

Propst stated there are things need to be clarified if they’re going to debate the bill that day.

“Because like so many other bills that we deal with, there are misunderstandings and things are misconstrued and somebody takes it and turns it upside down,” Propst said.

He said clarity is important right now because people are so upset about any taxes going forward.

Propst said the fact of the matter is, the CNMI is suffering right now and the Legislature does not have any revenue-generating bills moving forward, generating money.

After the discussions, House members then voted to pass the bill.