Proposed bill hikes license fees by 100 pct.-5,900 pct.

Banks, wholesalers, roadside vendors, scuba tours and virtually all other businesses in the CNMI will see “staggering” increases in annual license fees by 100 percent to 5,900 percent if House Bill 16-217 becomes law, according to the Saipan Chamber of Commerce.

Chamber president Jim Arenovski asked House Ways and Means Committee chair Rep. Ray N. Yumul to reject H.B. 16-217, which he said is simply another attempt to increase taxes in the guise of fees.

The proposed increases in business license fees amount to anywhere between $95 and $3,000. (See list)

Wholesalers, for example, will be required to pay $3,000 in business license fee instead of the current $50, a difference of $2,950 or a 5,900-percent increase.

Offshore banks will have to pay an additional $3,000 to secure a business license fee—from $1,000 to $4,000.

Roadside vendors of local fruits, vegetables and fish products that currently pay $5 in annual business license fee will be required to pay $100.

“We have, and will continue to, oppose tax increase measures in the midst of the Commonwealth’s economic depression,” Arenovski told Yumul in a Feb. 27 letter.

He said increasing taxes or fees at a time when business revenues are dwindling and costs are continuing to increase is not business-friendly.

“The private business sector is already the largest contributor to the Commonwealth’s general fund. Additionally, the size of the proposed increases is staggering and unsupported,” the Chamber president said.

The CNMI has lost its once mighty garment industry and is now relying mostly on tourism and federal aid to sustain the economy. As a result, business gross revenue and government collection in taxes and fees have been on a steep decline.

Reps. David Apatang, Oscar M. Babauta and Justo S. Quitugua, cosponsors of H.B. 16-217, said the business license fees in the CNMI have remained unchanged for many years, while the costs associated with processing the licenses have increased.

‘Enforce laws instead’

In his two-page letter to Yumul, Arenovski said the appropriate means to increase tax and fee collections is through the enforcement of existing laws and encouraging new business operations on the islands by making the CNMI more business-friendly.

“These increases will discourage new investment in the Commonwealth and will harm current business at a time when most companies are facing decreased revenues and increased costs,” he said.

The Saipan Chamber of Commerce is the largest business group in the CNMI. Its Government Relations Committee regularly comments on bills affecting businesses in the CNMI.