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Ways and Means OKs bill to decrease grace period for import taxes
The House Ways and Means committee is recommending the passage of a bill to decrease the time given to businesses to pay their excise taxes by half.
House Bill 19-138, authored by Rep. John Paul Sablan (R-Saipan), amends current law to change the grace period of payment for excise tax from 30 days to 15 days.
In concurring with the bill’s intent, the committee cited written comments from the CNMI Division of Customs, which believes that the proposed 15-day period “is ample time” for a business or importer to prepare payment for their import taxes.
“The 30-day excise tax grace period is too long as it delays revenue collections and usually results in outstanding accounts,” wrote Customs director Jose Mafnas in a letter to the committee.
The Saipan Chamber of Commerce, however, in another comment letter, said that 30 days was reasonable time period for payments owed, and said they strongly opposed the bill.
The Chamber said they represent more than 160 business, non-profit organizations, and government entities and that most businesses routinely pay their obligations on a monthly basis—noting that a decrease in the grace period from a month to 15 days would put “an onerous responsibility on business in our community.”
They said the reduced time period would leave insufficient time for correction and noted that once a tax has been paid by a business, it is cumbersome to follow up on a refund for small amounts.
