‘Finance is violating law’

Guerrero discloses that MVA now 90-days behind in paying offshore offices

Rep. Joseph “Lee Pan” T. Guerrero believes the Department Finance is technically violating the law for failing to remit $5.1 million in hotel occupancy tax collections to the Marianas Visitors Authority.

He urged Finance yesterday to transmit the amount now, as MVA is about three months behind on payments to its offshore offices, amounting to a total of $1.9 million.

“If any of these offshore offices shuts down, the domino effect is going to happen and we are not going to be able to see the number of tourist arrivals increased,” said Guerrero, who chairs the House Committee on Commerce and Tourism.

He said these offshore offices are there to promote the CNMI and MVA cannot pay them because of Finance’s failure to remit what the MVA is entitled to.

Guerrero also warned Finance Secretary David Atalig against using hotel occupancy tax money to pay for the obligation of the CNMI government.

Saipan Tribune was still trying to get comments from Atalig as of press time.

Guerrero said it is very clear that Public Law 18-1, which created an MVA trust, requires the Finance secretary to deposit the hotel occupancy tax collection into that trust.

This trust fund, Guerrero said, should be separate from the general fund, where all government revenues go. That doesn’t seem to be happening, Guerrero said, because the Finance secretary has yet to remit the hotel occupancy tax collection to the MVA since December.

Finance recently remitted about $250,000 to MVA, but Guerrero said this still leaves a remaining balance of $5.1 million that has yet to be remitted to MVA.

Citing law, Guerrero said the Finance secretary has 10 working days after the hotel occupancy tax is paid to Finance for Finance to then remit the collection to the MVA trust fund.

“He has not been doing that, so technically the Finance secretary is in violation of Public Law 18-1,” he said.

Guerrero said he has already told MVA managing director Priscilla Iakopo to convey his message to MVA board chair Marian Aldan-Pierce to look into this aspect.

If Finance still refuses to remit the money, then the only solution is to sue the CNMI government in court, he said.

“The tourists are paying the [hotel] occupancy tax; the hotels have visitors, so they are collecting. So where is the money?” Guerrero asked.

He said the hotel occupancy tax collection is not supposed to be comingled with the general fund but he doesn’t have a sense of that. Instead, what he is sensing is that this fund is being comingled with the general fund and is being used to pay the obligation of the CNMI government, which should not be the case.

“The government has to find its own sources. We cannot continue this practice because, if it does, we might as well change the law. And, instead of hotels remitting those funds to Finance, why not just have the hotels write the check to MVA directly?” he asked.

Guerrero said 80 percent of the hotel occupancy tax collection goes to MVA, while the 20 percent goes to the Retirement Settlement Fund.

He said MVA has a duty and responsibility to promote the CNMI and it’s only the tourism industry that is making the Commonwealth stay afloat.

Guerrero said he is actually drafting a letter to Atalig about his committee’s concern why MVA is not receiving its 80-percent share of the hotel occupancy tax.

“We cannot continue to hurt MVA because their responsibility is to promote the CNMI itself,” he added.

Ferdie De La Torre | Reporter
Ferdie Ponce de la Torre is a senior reporter of Saipan Tribune. He has a bachelor’s degree in journalism and has covered all news beats in the CNMI. He is a recipient of the CNMI Supreme Court Justice Award. Contact him at ferdie_delatorre@Saipantribune.com
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