$1.25 increase in cigarette tax within four years

Cigarette tax would be increased by a total of $1.25 in a four-year span starting with a 75-cent increase upon enactment into law and an additional 50 cents after three years, under a House bill that the Senate passed at 4:46pm yesterday.

For senators, the “gradual” $1.25 cigarette tax hike is more reasonable compared to the original House version of outright $2 increase in tax for every 20 cigarette sticks.

House Bill 18-118, Senate Draft 2 goes back to the House for action. House floor leader Ralph Demapan (Cov-Saipan) authored the bill.

At present, cigarette tax in the CNMI is $2 a pack. A pack has 20 sticks.

If the House approves the Senate amendment, then cigarette tax will become $2.75 as soon as the bill becomes law, and then to $3.25 after three years.

The cigarette tax hike bill passed the Senate by a vote of 7-0.

Three of the senators—Sens. Jack Borja (Ind-Tinian), Pete Reyes (Ind-Saipan), and Ray Yumul (Ind-Saipan)—voted “with reservation.”

The other “yes” votes were from Sens. Jovita Taimanao (Ind-Rota), Frank Cruz (R-Tinian), vice president Victor Hocog (R-Rota), and Senate President Ralph Torres (R-Saipan). Sen. Frank Borja (Ind-Tinian) left the session earlier, while Sen. Paul Manglona (Ind-Rota) was excused from the session.

The Senate Fiscal Affairs Committee, chaired by Taimanao, reviewed and recommended the bill’s passage in the form of Draft 1. Under the committee report, the increase would be 50 cents right away and another 50 cents after three years.

During the session, however, Taimanao offered a floor amendment that sets a $2.75 cigarette tax per 20 cigarette sticks upon the bill’s enactment into law, or a 75-cent increase from the current $2 a pack.

Taimanao’s floor amendment includes bringing the cigarette tax to $3.25 per 20 cigarettes after three years, or another 50-cent hike. Senators adopted the floor amendment.

During the session, Taimanao said the Fiscal Affairs Committee sees the need to deter people from engaging in harmful habits such as smoking, which the panel said is a contributing factor to non-communicable diseases, so they recommend passage of the cigarette tax hike bill. But at the same time, they recognize that a “gradual” increase in cigarette tax would be “more palatable” to the business community.

The Senate version of HB 18-118 also sets aside 50 percent of all excise taxes collected for deposit in an account to fund the payment of the CNMI government’s share of the Group Health and Life Insurance benefits, and for enforcement.

Others

Gov. Eloy S. Inos swears in the newest member of the Commonwealth Utilities Corp. board of directors, businessman Joseph T. Torres, at the Governor’s Office yesterday, shortly after being confirmed at the Legislature. (Office of the Governor)

Five minutes later, senators also confirmed by an 8-0 vote the governor’s re-appointment of Diego Songao to the Commonwealth Development Authority board of directors.

The governor swore in Torres immediately after the Senate confirmation, press secretary Angel Demapan said. Demapan said Songao has not been scheduled yet for swearing-in “pending his travel to Saipan from Rota.”

The Senate also adopted Hocog’s commemorative resolution honoring former Rota mayor Prudencio Taisacan Manglona for his public service and leadership. Senators presented a framed copy of the resolution to Manglona, now 80, at the hospital on Tuesday night.

Senators spoke of Manglona’s “exemplary, innovative, and progressive leadership in public service, community building, and economic development.” Manglona served as Rota mayor from 1978 to 1994.

At yesterday’s session, four of Manglona’s 48 grandchildren attended the Senate session to witness the resolution’s formal adoption. They included Dean, Savana, Donavan, and Thomas Manglona.