‘We must weigh our options on Guam tax’

The Senate concurred with the House over the weekend on the need to weigh options should the government of Guam pushes through with the plan to tax liquid fuel transshipments.

The Senate concurred with the House in House Joint Resolution 20-12, which urges the 34th Guam Legislature to oppose Guam Bill 257-34, authored by Guam Sen. Telena C. Nelson (D-GU) and introduced on March 13, 2018. The bill proposes to impose taxes on liquid fuel transshipments through Guam going to other Micronesian Islands, such as the Marshall Islands, the Federated States of Micronesia, and the CNMI, among others.

During discussions, Sen. Teresita Santos (R-Rota) pointed out that Rota, in particular, would be devastated if taxes on liquid fuel is introduced.

“With our current economic struggle, our people of Rota will be the hardest hit once [Guam] Bill 257-34 is passed by the Guam Legislature,” she said.

If the Guam Legislature succeeds, the taxes would ultimately boost the cost of fuel in the CNMI and other island nations who ship their fuel needs through Guam, being the region’s so-called transportation and shipment hub.

Santos noted that members of the Association of the Pacific Islands Legislatures also adopted a resolution urging the Guam Legislature to defeat the bill.

Senate President Arnold I. Palacios (R-Saipan) said he is also “very concerned” with the implications of imposing a tax on fuel transshipments through Guam.

Imposing taxes would not only affect fuel prices in the NMI but also disturb the economy of the whole Micronesia region, he said.

“I hope that the [Guam Legislature] reconsiders or rejects the bill,” he said.

Palacios noted that, like Rep. Joseph Deleon Guerrero (R-Saipan), he believes that the NMI government suing the Guam Legislature over imposing taxes on fuel transshipments is a possible recourse.

“Guam, like any other Legislature, may pass legislation that it feels like passing. This is something that I hope the Guam Legislature would consider that we are one region, even though we are different political entities,” he said.

If the Guam bill does get enacted, Palacios predicts a big change in transshipment routes in the region.

“We are exempted from the Jones Act,’ he noted. “We have been used to Guam being the shipping hub for goods coming from the West Coast and even from Asia to the rest of Micronesia. If these kinds of tariffs are imposed on the rest of Micronesia, we need to take a look at other options whether we really need to transship our goods, including liquid fuel, through Guam or maybe try transshipment through the NMI, Palau, or Pohnpei,” he said.