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House OKs gradual $1.75 cigarette tax hike bill
By a vote of 18-0, the House of Representatives approved yesterday a bill gradually increasing the CNMI’s cigarette tax from the current $2 to $2.75 for three years, and then to $3.75 after that.
The conference committee version of the health and revenue-generating bill also has to pass the Senate before going to Gov. Eloy S. Inos for action.
House floor leader Ralph Demapan (Cov-Saipan), author of the original House Bill 18-118, thanked his colleagues yesterday for passing a bill that addresses not only a major health issue but also helps fund cancer treatment programs and the government health insurance.
Demapan’s original bill would have increased the cigarette tax by an outright $2, doubling the current tax to $4.
But a “compromise” version produced by a six-member House and Senate committee made it a gradual increase of $1.75 spread in four years.
As soon as the bill becomes law, cigarette tax becomes $2.75 a pack. After three years, it becomes $3.75 a pack.
What this means for smokers is that a pack of cigarettes that retails for $3.75 right now could go up to $4.50 in a few days or weeks.
The compromise bill reserves 3 percent of excise taxes collected for cancer treatment and programs. That 3 percent comes from a decrease in excise tax percentage collected for the solid waste management program, from 10 percent to now 7 percent.
Moreover, 50 percent of all excise taxes collected from this will be deposited into an account to fund the payment of the CNMI government’s share of the Group Health and Life Insurance benefits and for enforcement.
