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‘Rebate cut to cripple economy’
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Posted on Apr 07 2006
Saipan Chamber of Commerce officials have expressed their opposition to the government’s proposal to reduce tax rebates, warning that it would cripple the local economy.
SCC president Charles V. Cepeda said that “any changes to the rebate structure will cripple our [already] ailing economy.”
“Do we want to really kill the economy?” asked Cepeda, noting that there may not even be enough revenue from the rebate tax if investors start leaving the island.
He also noted that giving the rebate funds to the Public School System and Northern Marianas College as proposed by House Bill 15-51 would not be sufficient.
He said these two agencies are already struggling with limited budgets.
He expressed concerns that new constructions would only prove useless if no fund is available to operate them.
Vice Speaker Justo Quitugua, who is the author of House Bill 15-51, aims to allocate $500,000 plus 10 percent rebate reduction revenue for the infrastructure needs of NMC and PSS.
Chamber vice president Alex Sablan recommended that the Chamber “not support the bill as there is no plan for maintenance beyond the building of facilities.”
Sablan likewise said that the rebate program should be kept “as it remains one of the major incentives for investment.”
Under the existing law, taxpayers get a rebate of up to 85 percent at the end of each tax year.
The release of tax rebates and refunds has been delayed in recent years due to the lack of reserve funds.
