SCC wants sales tax over BGRT, excise

Saipan Chamber of Commerce officials are pushing for the implementation of a sales tax rather than the business gross receipt tax and excise tax.

Chamber president Charles V. Cepeda and vice president Alex Sablan said a sales tax is transparent and easier to be administered.

“The proposal means elimination of BGRT and excise tax,” said Cepeda.

Sablan, who spoke of the sales tax during a recent Chamber meeting, said certain categories can be exempted from a sales tax such as food, medicines, and maybe construction items, to avoid the regressive nature of the tax.

“Exempt certain products so it doesn’t impact the lowest wage earners. Then you apply a greater tax on day-to-day consumables. Makes you think about what you’re buying, how you’re spending,” said Sablan.

He said that, under the present setup, consumers would not know the tax on a certain item because it is embedded in the BGRT, which is set at 5 percent.

A sale tax is a fee on consumption. It is normally a certain percentage that is added onto the price of a good or service.

An excise tax is a percentage imposed on all products entering the CNMI. It varies depending on the type of items.

Finance Secretary Eloy Inos said the elimination of BGRT and excise tax looks farfetched, especially at this time when the government is scrambling for funds. He said the excise tax is a major source of government revenues.

The government collects an average of $27 million from excise tax per fiscal year.

BGRT gives the government an average of $55 million per fiscal year.