A lawmaker urged his colleagues to consider a lawsuit if the Guam Legislature goes ahead and passes a bill that imposes a tax on liquid fuel.
Rep. Joseph Deleon Guerrero (R-Saipan) believes that, if need be, a lawsuit must be filed against Guam if the island’s legislature passes Guam Bill 257-34, which proposes to impose a tax on liquid fuel passing through the island. Guam Sen. Telena C. Nelson (D-GU) introduced the bill on March 13, 2018.
“I wanted to get clarification on whether Guam can impose taxes on commodities not intended for Guam [residents],” he said, adding that only the CNMI government has the authority to impose taxes on commodities consumed by its residents.
Deleon Guerrero compared imposing taxes on liquid fuel transshipped through Guam intended for residents of the CNMI, the Marshall Islands, and the Federated States of Micronesia to the taxes imposed by the British colony on tea back in the 1770s, when the U.S. was under British rule, ultimately sparking the American Revolution.
“If it’s not intended for [the Guam] market, then that is, in my opinion, taxing without representation—we don’t get to vote for the leaders of Guam; we have no say in who their leaders are,” he said.
At the Micronesia Island Forum in late April 2018, Micronesian leaders, along with members of the Association of the Pacific Island Legislatures, agreed that such a tax would be detrimental to the region, since all liquid fuel goes through Guam. Deleon Guerrero told Saipan Tribune that a letter from the MIF to the Guam Legislature underscored its opposition to the bill.
Deleon Guerrero noted that if taxes are imposed on fuel by the Guam government, then fuel prices for RMI, FSM, and the CNMI would skyrocket since fees associated with transshipping goods through Guam are also imposed, such as a stevedoring fee, transshipping fee, storage fee, on-loading and off-loading fees, among many others.
“If we have our own taxes and, on top of that, Guam taxes, [fuel prices would skyrocket]. It would affect everything,” said Deleon Guerrero. “We have no say because [Guam is] not accountable to us. We can’t vote them out of office for doing this.”
Deleon Guerrero added that if the Guam Legislature does impose liquid fuel taxes, the CNMI government should consider its options such as a lawsuit or even bypassing Guam when purchasing fuel.
“…The other island nations in the FSM and [RMI] may also have to rethink of bypassing Guam because of the tax. That might be an opportunity for the CNMI to be a transshipment point for their fuel needs,” he said.