Blanco: Additional tax to impact island economies

Rep. Ivan A. Blanco (R-Saipan) is hoping the Guam Legislature would think of the impact of a bill that was introduced by Sen. Telena C. Nelson that aims to impose a tax on transshipment fuel.

He joins the call earlier made by the nine leaders of the Micronesian Islands Forum and members of the Association of the Pacific Islands Legislature in asking 34th Guam Legislature Speaker Benjamin J.F. Cruz and its author to consider in entertaining the bill.

Bill 257-34, co-authored by Sens. Thomas C. Ada and Dennis G. Rodriguez Jr., would eliminate tax exemptions on transshipped fuel that goes through the port of Guam once it becomes a law.

Transshipped fuel via Guam—intended for the ports in the CNMI (Saipan, Tinian, and Rota), the Federated States of Micronesia (Chuuk, Kosrae, Pohnpei, and Yap), Palau, and the Republic of the Marshall Islands—has been tax exempt for three decades.

“While I respect the bill’s intent to raise critically needed funding for public services to benefit the people of Guam and for safety at the Guam port, the $4.5 million estimated to be realized through imposing this transshipment tax will be minimal compared to the far reaching and deep ramifications on the economies of the CNMI, FSM, RMI, and Palau,” said Blanco.

“Not to mention the future effects of further migrations to Guam from these sister islands because of the ill effects this bill will certainly place on the fragile economies of our region,” he added.

Blanco said short-term economic gains to be earned by Guam at the expense of their island neighbors would benefit no one. “I view this act as a step backwards for the advancement of our region and our competitiveness in the world.”

“Furthermore, I strongly feel this bill is inconsistent with the goal that we should work together for our common benefit, rather than on what will be harmful to each island jurisdiction,” added Blanco.

Gov. Ralph DLG Torres, being the chair of the 23rd MIF, spearheaded a letter that expressed by all the leaders of the nine Micronesian islands. The letter said additional tax imposed on transshipment fuel would have an adverse impact on other economies.

“As we are sure you are aware, our communities share many of the same challenges in the Micronesian region. Further, history will show that when faced with obstacles, we strive to work together with the goal of reaching a solution that is beneficial, or not harmful, to any of our jurisdiction. As such, if this bill were to pass, the negative effects would be detrimental,” Torres said in the letter.

The presidents of FSM, the Marshall Islands, and Palau, and the governors of the CNMI, Guam, Chuuk, Kosrae, Ponpei, and Yap are the MIF members.

FSM President Peter M. Christian, Palau President Tommy E. Remengasau, Marshall Islands President Hilda Heine Ed.D., Guam Gov. Eddie Baza Calvo, Chuuk State Gov. Johnson Elimo, and Pohnpei State Gov. Marcelo K. Peterson joined Torres in signing the letter. Yap State Lt. Gov. James Yangetmai signed in behalf of Gov. Tony Ganngiyan.