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Teno wants close monitoring of E-commerce
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Posted on Apr 05 2000
Gov. Pedro P. Tenorio has called for monitoring of purchases made by CNMI residents through Internet to determine whether the island government is losing huge revenues through tax collections.
The chief executive made the call in light of the diminishing revenues in the Commonwealth that, although a result largely of the current economic difficulties confronting the island, may also be impacted by the emerging industry.
Internet business or e-commerce has become a multi-billion industry in the United States where some consumers prefer to buy goods and services, instead of going to retail stores or wholesalers, for cheaper prices.
Most of the merchandise being sold in the market are tax-free, although some states continue to impose sales taxes.
“With the increased use of the Internet for e-commerce. we must also begin to carefully monitor business tax and excise tax collections in another way,” he said.
“We will need to determine if residents are making sufficient purchases through the Internet to impact imports and sales of local businesses over the next few years,” added Mr. Tenorio.
So far, there are no available statistics on Internet purchases by island residents, but because of its accessibility to the U.S. market, the CNMI may have been impacted already by the growing industry, according to business analysts.
Mr. Tenorio disclosed this development when he submitted the other his proposed FY 2001 budget amounting to over $220 million.
Revenue collections for the next fiscal year are projected to inch up by 6.7 percent or $15 million over the FY 2000 income of $211 million.
Most of the revenues will be realized from income taxes, business gross receipt and excise taxes which will increase as a result of positive growth in the tourism industry, according to finance officials.
