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‘Businesses will not be penalized’
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Posted on Apr 17 2006
The Fitial administration assured businesses yesterday that they would be spared from the government’s efforts to correct its financial situation.
Press secretary Charles P. Reyes Jr. said the financial crisis was not created by the private sector, “but by previous mismanagement.” Thus, he said, businesses should not be punished by a tax increase or suspension of tax rebates.
“It would be unfair to penalize the private sector. This is not their creation,” Reyes said.
He made this statement in response to a call by some community members for the government to raise tax rates or suspend tax rebates to address the government financial problems. They say that the administration should share the burden with all CNMI residents, rather than “punishing” government employees by cutting their wages.
Reyes said, however, that businesses had already made sacrifices to adjust to the economic slump.
He cited, for example, the work-hour and staff reductions made by DFS Galleria and the downsizing by the garment factories.
“They adapted when the economy went down, but the public sector never adapted,” he said.
Earlier, the Saipan Chamber of Commerce had expressed its opposition to the Legislature’s proposal to reduce tax rebates in order to raise funds for school infrastructure projects.
Chamber president Charles V. Cepeda had said that any changes to the rebate structure “[would] cripple our ailing economy.” He had maintained that the Commonwealth’s tax rebate system made the islands attractive to investors.
