Senate president: It’s not the right time to impose taxes on private companies

“It’s just not the right time…[to] impose taxes on the private sector.”

This was the sentiment shared by Senate President Edith DeLeon Guerrero (D-Saipan) during a Senate session last week where House Bill 23-74, which would impose a 3% tax on construction activities, was passed.

During a Senate session last week, a motion to pass H.B. 23-74, a measure to impose a 3% tax on certain construction activities—was made.

Before voting on the bill, DeLeon Guerrero expressed that she believes it is not the right time to impose additional taxes on construction activities.

“It is not the right time to impose tax increases when we know that there are revenue activities being realized in at least one municipality here, Tinian, due to the military buildup. Tax increases will ultimately impact ordinary consumers, the people who are already suffering and can barely afford their family’s bare necessities,” she said.

DeLeon Guerrero further stated that raising taxes on a depressed economy, especially when businesses have yet to return to pre-pandemic levels, should not be the solution to the government’s lack of financial management and economic initiatives to generate fresh revenue to fund its programs.

“It’s just not the right time…[to] impose taxes on the private sector, which is the one producing revenues for the Commonwealth,” she said.

Lastly, DeLeon Guerrero said hopefully, from all of the revenues that will be generated from construction activities on Tinian, a supplemental budget can be submitted to the Legislature allowing the Legislature to address financial shortfalls.

However, due to a 7-2 vote, the Senate passed H.B. 23-74.

DeLeon Guerrero and Sen. Dennis Mendiola (R-Rota) were the two to cast “no” votes on the passage of the bill, while Senate vice president Sen. Donald Manglona (Ind-Rota), Senate floor leader Sen. Corina Magofna (Ind-Saipan), and Sens. Celina Babauta (D-Saipan), Karl King-Nabors (R-Tinian), Frank Q. Cruz (R-Tinian), Jude U. Hofschneider (R-Tinian) and Paul A. Manglona (Ind-Rota) all voted “yes.”

The bill now goes back to the House of Representatives.

Authored by Rep. Ralph N. Yumul (Ind-Saipan), H.B. 23-74 originally proposed to impose a 3% tax on construction activities with an expenditure threshold of $250,000.

The Senate Fiscal Affairs Committee increased this threshold to $350,000.