Amnesty hikes revenue projection to $215M

The Finance and Commerce departments projected that the new tax amnesty law would result in additional revenue of at least $2.1 million, increasing the CNMI’s projected revenue for Fiscal Year 2005 to almost $215 million.

This development also averted a possible deadlock in the Legislature on the amount of available budgetary resources for the next fiscal year.

Gov. Juan N. Babauta yesterday signed House Bill 14-114 into law in the presence of Senate President Joaquin Adriano, House Speaker Benigno Fitial and other lawmakers at the Legislature, where the leaders convened to discuss about the CNMI’s fiscal matters.

“The projected ability to collect significant tax revenues during the tax amnesty period is based on the fact that provisions of this measure are identical to those set forth in Public Law 12-51, a bill that took effect in May 2001 and resulted in an immediate increase in revenue as well as bringing many individuals into compliance with their tax obligations,” the governor said.

In signing House Bill 14-114 into law, Babauta agreed with the fiscal analysis made by the Finance and Commerce departments that the measure would generate at least $2.1 million.

Adriano welcomed this, disclosing that the leadership of both chambers and Babauta agreed to raise the amount of approved budgetary resources for the next fiscal year by $2.1 million.

Adriano said the Senate would work on amending House Concurrent Resolution 14-1—which provided only over $212.65 million in identified budgetary resources for the next fiscal year—to reflect the projected revenue that will come in due to the tax amnesty. Identified budgetary resources would then reach close to $215 million, he said.

The lower house earlier adopted the resolution, indicating that the next fiscal year’s budget might be reduced from the current fiscal year’s $213-million level.

Without the revenue-generating measures outlined in the integrated fiscal plan to meet the governor’s proposed $226 million budget for fiscal year 2005, the House set the budgetary resources for the next fiscal year at only $212,651,911—excluding revenue that would be generated from tax collections during the tax amnesty period. This slashed over $13.69 million from the governor’s proposed spending plan for fiscal year 2005.

The House had also capped the funding available for the CNMI government’s operations at $210,525,392, since over $2 million of the identified budget resources for the next fiscal year would be allotted to pay off 1 percent of the budget deficit.