Atalig opposes bill that increases tobacco taxes, suggests tax on remittance money

Efraim M. Atalig

Rota Mayor Efraim M. Atalig expressed opposition yesterday to a bill that seeks to bring tobacco taxes to the recommended level, tie the tax rate to inflation, and invest revenues from the tax into health promotion and disease prevention.

Speaking before a public hearing on House Bill 22-54 at the Rota Mayor’s Office conference hall conducted by the Senate Committee on Fiscal Affairs, Atalig believes it’s not the right time for this legislation. Instead, he suggested having some sort of tax on the remittance money leaving the Commonwealth.

The House had already passed the bill and it is now before the Senate for action. Rep. Christina E. Sablan (D-Saipan) is the principal author of the legislation.

The bill seeks to update the definition of tobacco products in the CNMI’s excise tax laws; bring tobacco tax rates to the recommended level; set tobacco tax rates to increase with inflation; and invest tobacco tax revenues in health promotion and disease prevention and control programs in the CNMI.

Atalig believes that the $4 per pack of cigarettes or so is “a little too steep” for people.

“Perhaps maybe it can be lowered to $2 or so,” Atalig said.

He said the Legislature or the House of Representatives should be looking at other funding sources, such as the remittance because those are funds that exit the CNMI.

“And it’s not…it’s never going to come back. Therefore, I believe we should have some sort of tax on those remittances leaving the Commonwealth,” the mayor said.

At the start of the public hearing, committee chair Sen. Victor Hocog (R-Rota) said this particular bill was brought up before the budget bill for government’s operations in fiscal year 2023 was passed by the Legislature.

Hocog said with this particular idea to increase the tobacco tax and sugar sweetened beverages tax, the House made this a rider to the budget bill and was passed by the members of the House.

Fortunately, he said, when the bill reached the Senate, they agreed with their legal counsel that this particular legislation should be done as a standalone bill and not as a rider on the budget appropriations act.

Hocog said it’s the reason why the Senate Committee on Fiscal Affairs is now conducting a public hearing on a single legislation to determine whether the bill merits action in the Senate.

“So your comments this afternoon will really help the committee come out with their answer as to whether the bill should move forward, or we should be hold back at this time,” the senator told the public.

In passing the bill, the House found that the CNMI’s public health and health care infrastructure lacks the funding necessary to prevent and offset the negative health effects of tobacco use, and to establish sustained non-communicable disease and risk factor prevention and control programs.

The House determined that the bill will ensure that 45% of the cigarette tax will be for the Commonwealth Healthcare Corp.’s activities relating to the monitoring or morbidity and mortality in the CNMI from illnesses that are caused or exacerbated by tobacco use, and for other health care purposes.