Tax amnesty bill hurdles Senate

If it fills government coffers, it must be good.

A bill seeking to grant delinquent taxpayers a 90-day grace period to settle their obligations with the government passed the Senate floor last week. The proposed measure is seen to provide additional revenues for the government.

However, senators took turns in grilling former Revenue and Taxation Director Rufino Inos for an important mechanism that would clearly define the implementing policies, under which the proposed measure will be based.

Senators also made sure the amnesty bill will not run against the Commonwealth’s existing tax system.

Mr. Inos explained that under the proposed tax amnesty measure, settlement of unpaid taxes before the enactment of House Bill 12-345 will be allowed under certain regulations implemented by the government.

He said waivers on interest or forms of payments will be efficiently mapped out and strictly enforced to increase government’s revenue. The proposed measure will also have a mechanism which will improve taxpayers’ capability to settle government obligations in compliance with the existing laws.

Mr. Inos added that CNMI does not have a regulatory board to amend existing revenue codes but certain provisions can be implemented to waive penalties which will be afforded to delinquent tax payers.

The Senate expressed several concerns on the proposed measure including possible problems with good taxpayers and possible additional payments of interest which will be waived off to accommodate certain businesses.

In addition, the Senate sounded the alarm over the fact that the government might be sending a wrong message to the business community that it is okay not to pay taxes on time.

But Sen. Pete Reyes pointed out that HB 12-345 is another move on the part of the government to help businesses survive the hard economic times.

Mr. Reyes said only certain years are to be afforded the amnesty and only with certain amounts. This will help the government recoup multi-million losses from delinquent taxpayers, he added.

The proposal has also earned the approval of the House of the Representatives after serious consideration. Legislators said the measure will help replenish government coffers.

The CNMI tax system depends on the voluntary compliance of taxpayers, thus, putting the entire responsibility on accurate and timely reporting of tax liabilities to the discretion of taxpayers.

The tax amnesty program will pave the way for the government to recover more than $30 million in unpaid taxes, which can be used in helping the CNMI to restart its economic development programs. (EGA)