Sablan: Remittance tax is a discriminatory double tax

Christina E. Sablan

Rep. Christina E. Sablan (D-Saipan) said Monday that a remittance tax is a discriminatory double tax that actually disproportionately impacts poor and working families.

Sablan also stated that what truly disproportionately impacts the poor and working families of the CNMI community are chronic diseases like cancer, diabetes, and heart disease.

The lawmaker talked about a remittance tax and disenfranchising the poor issues in response to Saipan Tribune’s request for comments about the statements made by Rota Mayor Efraim M. Atalig and Sen. Karl R. King-Nabors (R-Tinian) pertaining to a bill that proposes to raise tobacco taxes.

Speaking before a public hearing on House Bill 22-54 at the Rota Mayor’s Office conference room conducted by the Senate Committee on Fiscal Affairs last Tuesday, Atalig said he 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.

At the same public hearing, King-Nabors opposed the bill, asserting that it will be disenfranchising poor people in the community.

King-Nabors said at the end of the day, the people that are going to be affected by this legislation are those who don’t have the means, because it would raise taxes on tobacco and on sugary drinks.

The senator suggested that a better approach would be incentivizing people to purchase items that are healthier, reducing the costs of living to live a healthier life, as opposed to taxing tobacco and beverage products.

Sablan is the principal author of H.B. 22-54, which the House of Representatives had already passed. The bill is now before the Senate Fiscal Affairs Committee chaired by Sen. Victor B. Hocog (R-Rota).

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.

In response to Atalig’s call to tax remittances, Sablan said,“If you’re siding with tobacco and pushing for remittance taxes, well, you don’t really care about the poor.”

With respect to King-Nabors’ statement about disenfranchising the poor, Sablan said tobacco use is a known risk factor for cancer, diabetes, and heart disease.

“Tobacco addiction, unscrupulous business practices of the tobacco industry, the underfunding of our healthcare system, and lack of access to health services also disproportionately impact poor and working families,” she said.

Sablan said effective tobacco taxation is a proven, evidence-based policy tool to reduce tobacco use in communities and support healthcare and public health systems.

She said tobacco is not an essential commodity like food or medicine. Rather, it is a highly addictive, lethal product backed by an extremely profitable and powerful industry, she added.

“We can both raise taxes on tobacco and direct tobacco revenues to healthcare and health promotion. This is not an either/or situation. We can and should do both,” Sablan said.

She said the bill does both: it raises tobacco taxes to levels recommended by local health officials in line with Centers for Disease and Prevention, and World Health Organization guidelines to reduce the prevalence of tobacco use, and directs a greater share of tobacco revenues to healthcare and public health services.

Sablan pointed out that 5% of tobacco revenues would also go to tax collection and enforcement.