The bill that aims to create a Department of Revenue and Taxation needs further review, according to the House of Representatives lawyer, since the CNMI Constitution limits the number of departments in the CNMI government.
Senate Bill 20-01 aims to turn the Division of Revenue and Taxation, which is under the Department of Finance, into a separate department.
House legal counsel John Cool, in last week’s House Judicial and Governmental Operations committee hearing, advised members that creating another department is not possible since it would exceed the number stated in the CNMI Constitution.
There are currently 10 departments that hold Cabinet secretary status under the Governor’s Office. Aside from Finance, the other departments are Commerce, Community and Cultural Affairs, Labor, Lands and Natural Resources, Public Lands, Public Works, Public Safety, Corrections, and Fire and Emergency Management Services.
In a letter to JGO chair Ivan A. Blanco (R-Saipan), Rota Mayor Efraim M. Atalig supports the creation of the department. “With a Department of Revenue and Taxation, revenue collection will be the focus of this department. Under the present structure, the Department of Finance secretary is too preoccupied with other mundane tasks to focus on revenue collection.”
“As pointed in the findings and purpose of the bill, I wish to reiterate that the salary and of the [Revenue and Taxation secretary] would be exempted from the statute governing the salaries of department secretaries. Perhaps this provision would be included in the bill. With an attractive salary, perhaps a professional tax enforcer from off-island can be recruited. We need to pay attention to this function in government in order to maximize revenue collection.”
S.B. 20-01 would lessen the Finance secretary’s workload, especially now that the CNMI has multiple resources of revenue.
Finance Secretary Larrisa Larson is the current head of the department. Aside from Revenue and Taxation, the other divisions under Finance are Customs and Procurement and Supply.
If S.B. 20-01 becomes a law establishing the new department, Revenue and Taxation would become a Cabinet-level department also headed by a secretary under the CNMI’s Executive Branch. Its main responsibility would be overseeing revenue collection and enforcing CNMI tax laws.
The new department would facilitate the collection of income, sales receipts, gaming provisions, and other taxes. It would be composed of two divisions: Tax Services and Tax Enforcement.