Rebates, refunds out in September

Taxpayers who filed their returns way before the April 15 filing deadline will receive their rebate checks as early as second week of September, according to Mike Sablan, the governor’s special advisor for finance and budget.

He said the Department of Finance has begun review of the returns in preparation for release of the checks, which the government hopes to complete by October 15.

The staff of the Revenue and Tax division have been working overtime to verify and reconcile the returns against what had been reported by the employers.

According to Sablan, they still need to modify a computer programming to reflect the difference in tax years.

“We are still on target on our schedule to release rebates beginning September,” he told reporters yesterday, adding the first batch of checks will be mailed out by second or third week of next month.

The government needs to raise between $25 million to $28 million to meet its financial obligations to taxpayers covering tax year 1998, the lowest in three years.

Sablan attributed the decline in the total amount to be paid out to a change in rebate rates which the Legislature passed in 1997. The rate in previous tax years was uniform at 95 percent of the returns, while the present level is at 90 percent, 70 percent and 50 percent, depending on the tax base.

A total of $32 million in rebate checks was paid out to approximately 19,000 taxpayers in the two previous years before 1998. “This year we are projecting between $25 million to $28 million in rebates, a slight reduction attributable partly to the change in the rebate rate,” said Sablan.

The special rebate trust account set aside to pay the government’s tax obligations has funds between $15 million to $20 million which will be enough to cover payment of the first batch of rebate checks.

“We are building that as we go along,” he said, adding the administration intends to mail out checks in the initial batch of those who filed their returns first.

“There is time involved in processing these returns. We don’t want to be caught in a situation where we released the wrong amount to the wrong taxpayer,” Sablan explained.

The government earlier has completed payment of corporate refunds and the Earned Income Tax Credit to low-income families, both of which entailed total expenditures of at least $10 million from the cash-strapped government.

Gov. Pedro P. Tenorio has had to reassure the public on the ability of the government to meet its commitment to taxpayers as his administration has been delayed in paying rebates and refunds due to the financial difficulties confronting the CNMI over the past two years.

“A lot of us in the community are looking forward to their release,” Sablan said.