IPI poured over $200M to NMI economy
The NMI’s economy has undeniably soared to new heights since Imperial Pacific International began pumping into the local economy fresh revenues in form of taxes and fees beginning 2014.
The magnitude of Imperial Pacific’s contributions came at a time when the islands were experiencing its toughest challenge: mounting financial obligations including the collapsing pension funds for retirees and their survivors.
The NMI government has been optimistic that the local economy will only begin recovering once Imperial Pacific’s initial investment materializes, and in particular, the Phase 1 of its investment: the multimillion-dollar casino-resort/hotel project in Garapan.
However, new revenues came in earlier than projected.
For the past three years and four months, Imperial Pacific has contributed a total of $201,569,870.95. This is from combined payments of Business Gross Revenue Tax, corporate income tax, excise tax, casino license fees, Commonwealth Casino Commission operation fund, donations and payroll withholding tax.
From Day 1, when Imperial Pacific was awarded the exclusive casino license, it vowed to support the Commonwealth’s needs. Imperial Pacific committed $2 billion through long-term investments as part of its 40-year exclusive license agreement with the central government.
Considered by economic watchers as the most expensive investment in the Pacific region, the opening of the Garapan casino resort project has been projected to be profitable for both Imperial Pacific and the NMI government.
But revenues and taxes generated from the initial training facility, Best Sunshine Live, a subsidiary of the Hong Kong-based investment giant, provided early and unexpected new cash flow to the local government.
The bulk of Imperial Pacific’s local contribution came in the form of BGRT payments.
From 2015, 2016 and the first four months of 2017 (January to April) the NMI government collected a total of $77,641,710.12. This is the largest Business Gross Revenue Tax payment in 10 years made by a single investor in the CNMI.
Of this amount, a total of $4,586,550.54 in BGRT was paid by Imperial Pacific in 2015.
In 2016, Imperial Pacific paid $48,020,146.86 BGRT. This is a whopping 947-percent increase compared to the prior year. This is also the largest single source of revenue that the NMI government has generated in any given calendar year for the last 10 years.
During the first four months of 2017 (January to April) Imperial Pacific remitted $25,035,012.72 in BGRT. If this number holds for the next eight months of this year, the NMI government stands to realize a 56-percent increase in BGRT tax collection from Imperial Pacific alone, a total of $75,105,038.16 by end of 2017.
On top of the business gross revenue tax, the largest private sector employer paid $29,965,886.77 in corporate income tax. Of this amount, $24,515,886.77 was paid in 2016 while in the first four months of 2017 it paid $5.450 million.
Excise tax, or import taxes from goods brought in by the investor, was pegged at $6,958,127.54, for 2015, 2016 and the first four months of this year.
Rescuing pension fund
Another bulk of Imperial Pacific’s commitment to the local economy was the casino license fee. For the period covering 2014 to the first four months of 2017, it already transferred $64.750 million in casino license fees.
The casino license fee was primarily tapped to rescue the collapsing government pension plan for all of the Commonwealth’s retirees and their survivors.
As of Jan. 31, 2017, there are 2,416 retirees on Saipan, 300 on Rota and 203 on Tinian.
From September 2014, the NMI government never missed out in meeting its pension obligation to all retirees as a result of Imperial Pacific’s tax payments.
Of the total casino license fee paid, $31 million was paid in 2014 (advance payment for year one and year five), $15 million for 2015 and 2016. They have also paid $3.750 million for the January-April period of 2017.
As part of its casino license agreement, Imperial Pacific must also provide for the Commonwealth Casino Commission’s operation fund. Since 2015 to April 2017 a total of $4.5 million was funneled into CCC’s funding operation.
Additionally, a total of $11,124,553.35 was donated separately by Imperial Pacific. Of the amount, $10 million was for the free CUC vouchers to all residents in 2014. This is part of the community chest fund that Imperial Pacific had committed to the people of the Commonwealth.
The company is now the largest private sector employer in the Marianas. With over 1,500 employees it remitted $6,629,593.17 in payroll withholding taxes to the local treasury. This covers the period from 2015 to end of April 2017.
Imperial Pacific’s investment has revived confidence in the overall economic landscape of the islands, particularly the travel industry, the main economic mainstay.
The islands’ popularity among Asian travelers is going up again. Imperial Pacific’s aggressive marketing campaigns facilitated the growth in tourism arrivals.
Imperial Pacific said that its partnership with the CNMI government has been beneficial.
There are also new construction and repairs of roads, hotels, and opening of new businesses, and Imperial Pacific is confident that it will continue to stimulate the local economy and attract more investors.
“Together, as partners, we can continue to actively look for new ways to improve the local economy and ultimately transform the islands into a global destination that offers world-class services and friendly investment climate,” Imperial Pacific said. “The benefit to the people of the CNMI has been …not only new job opportunities but also improved way of life that has never been felt until recently.” (Imperial Pacific)