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Chamber opposes tax hike measure; urges govt to cut spending instead
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Posted on Aug 29 2011
Saipan Chamber of Commerce president Douglas Brennan has told Rep. Stanley Torres (Ind-Saipan) that the Chamber is “vehemently opposed” to the lawmaker’s proposal to increase gross revenue taxes, saying it would “further decimate an economy already in recession.”
“Now is not the time to extract, through increased taxation, funding for government expenditures from businesses that are barely surviving,” Brennan told Torres in a letter dated Aug. 27.
Torres formally introduced his House Bill 17-212 on Friday; it is now under committee review.
Brennan said increases in the cost of doing business in the CNMI would have a net negative effect on business activity, consumer pricing, actual revenue generated by the proposed increases, and jobs in the CNMI.
The Chamber, the largest business organization in the CNMI with some 150 members, is opposed to the bill’s proposal to increase the tax on the total gross revenue of individuals in the CNMI, a tax on agriculture and fishing, and increased taxes on manufacturers and wholesalers.
Brennan took note of the bill’s findings: “During this time of financial hardship, it is necessary for the government to reduce expenditures and increase revenues.”
“SCC would ask what the Legislature has accomplished, besides oversight on some reductions in Executive Branch salaries, whereby the Legislature has reduced its own expenditures,” Brennan said.
He said the Chamber endorses the legitimate need to reduce the size of the Legislature, as outlined in numerous attempts to scale down seats in the Legislature itself, including an initiative that Rep. Joseph Palacios (R-Saipan) introduced early this year.
Torres’ bill says the burden of adjusting to the current level of available resources should be shared by all members of the economy and not placed on only one group.
Brennan said the Chamber finds this statement “not only unenlightened, but inflammatory” as well.
He also said the calculation in the bill is “suspect.” The bill says the maximum tax on gross revenues would be increased from 5 percent to 6 percent, thereby increasing a $100 purchase to $101.
