TENO ASSURES TOURISM LEADERS No tax hikes

Gov. Pedro P. Tenorio pledged yesterday before tourism leaders not to raise taxes and impose new fees at this time when the economy is still reeling from the impact of the Asian recession that has pulled down visitor arrivals to the CNMI.

He also sought support of the business community in improving the delivery of public services and in wooing foreign investments into the Commonwealth, saying that the government is dependent on revenues it generates from the sector.

“This is not the right time to increase tax. We are fortunate that we are getting revenues at this time,” the governor told the annual general membership meeting of the Marianas Visitors Authority held at the Diamond Hotel.

The statement was in response to a question from one of the participants in the audience who noted that while most businesses have stood by the government during the last two years of serious economic difficulties, they would still face higher taxes and fees that would cut into little profits they make.

Such increases included the landing fees to the popular tourist destination of Managaha Island, port and wharfage fees that have been imposed by the Division of Public Lands and Commonwealth Ports Authority.

But Mr. Tenorio quickly denied that his administration is trying to hike taxes and fees, particularly for the hotels, as he has even asked departments and agencies to live within the limit of available resources in order to not burden the business sector.

The chief executive pointed out too that the CNMI has agreed to waive or reduce some of the airport fees just to accommodate the appeal of carriers like Northwest, Japan Airlines and Mandarin Air.

“I will assure you that I will look into it if there’s any proposal [for higher taxes and fees],” he told over 100 representatives from most of the biggest tourist-related businesses on the islands.

Sympathizing with the industry due to the decline in the number of tourists and low hotel occupancy, Mr. Tenorio said he is aware that most of the visitors are not spending as much as they used to just before the Asian recession in late 1997.

He also acknowledged the belt-tightening efforts and costs cutting that have been implemented by hotels, shops and tour operators for nearly three years just to be able to survive the hard times.

“Let us work together,” he called on the business leaders. “Let us know your problems… Tell us how we can improve our government, how we can go out and encourage new investors.”

The tourism industry, the islands’ economic backbone, has been battered by the currency crunch that hit most of east Asian countries, especially Japan and Korea which have been the CNMI’s largest source of tourists and investments for the past 20 years.

While MVA statistics have been positive for the last few months, many tourism leaders believe it will take years before the Commonwealth can expect steady growth in the sector.

But efforts are underway to boost the local economy, including additional direct flight service from key Asian cities as well as legislative proposals seeking to ease restrictions against foreign investments and business climate here.