Another tax amnesty now in effect

Tax delinquents have another chance to finally settle their outstanding tax obligations with the government without penalty.

Gov. Juan N. Babauta signed on Friday House Bill 14-372, which aims to provide a 180-day amnesty period for the filing of delinquent returns and the payment of delinquent taxes “without imposition of penalty and interest, with certain exemptions and for the waiver of penalty for failure to obtain a business license.”

The bill recently passed both House of Representatives and the Senate.

Babauta said that, although he had said that he would no longer support another tax amnesty when he approved one last year, “current economic pressures” facing small businesses and families prompted him to sign the bill.

“In signing Public Law 14-28 [in September 2004], I indicated that, although I was confident that a tax amnesty program was necessary to address the economic realities facing individuals, businesses and the CNMI government, I would not support any further granting of any such tax amnesty program. Since the enactment of P.L. 14-28, however, rising fuel costs, the pullout of Japan Airlines, and other external market forces have increased the economic pressures facing small businesses and families with outstanding tax obligations. In light of this change in circumstances, I have decided to sign this measure into law,” said Babauta in his Sept. 30 transmittal letter to the Legislature.

H.B. 14-327 became Public Law 14-90.

In his letter, Babauta said that he has instructed Finance Secretary Fermin Atalig that 25 percent of all funds collected under the new amnesty program be used for increased tax enforcement and collections.

In September 2004, the government enacted Public Law 14-28, which gave tax delinquents 120 days within which to settle their obligations without paying interests and penalties.

During the 12th Legislature, the government passed P.L. 12-51, which gave similar privileges to tax evaders.

H.B. 14-372, introduced by Rep. Clyde Norita and Vice Speaker Timothy P. Villagomez, said that not all delinquent taxpayers took advantage of the previously passed laws.

It said that a third amnesty program should be established because “it is still the most cost-effective way for the government to collect tax revenue during these difficult times.”

The Finance Department said earlier that it met its target collection of $2 million from the 2004 tax amnesty law.