Tax experts brief House on proposed tax changes

Tax experts discussed tax and revenue policies in the CNMI and recommended to members of the House of Representatives several measures that would shore up the revenue streams of the government as well as plug up loopholes in the tax system.

In a one-and-a-half hour presentation Friday, tax experts Joel Bergsma, Esther Ada and Rufino Inos briefed representatives on the problems besetting the Tax and Revenue Division.

The discussion was part of preparations before the House decides on the fate of House Bill 14-180, the bill that seeks to repeal 4 CMC Division 1 Sections 1102 through 6 of Chapters 1, 8, and 9 of the code.

According to the House Committee on Ways and Means, the measure aims to provide a detailed administrative provision necessary for the application and enforcement of general revenue and taxation laws, including liens, levies, examinations, and summons.

Committee chair Norman Palacios said the measure, which was reviewed jointly by the Department of Finance and the Attorney General’s Office, recommended that clarification of withholding tax rate be incorporated to the existing law.

Also recommended were provisions on additional accountability for government employees or elected officials, disclosure provisions for contact of third parties, tax payers right in regards to the statute of limitation, and assessed penalties for failure to file a tax return or to pay tax due on date prescribed under the law.

The committee chair added that Finance Department supports the bill since it would provide extensive input to further refine the administrative and enforcement provisions of the bill.

“The department has expressed that the bill will provide them with the enforcement tools to detect those who are not complying with the taxation laws, while providing taxpayers with due process rights,” the standing committee report reads.

The measure would also provide new provisions for the treatment of private delivery services, accounting to taxpayers, service by mail to third party record keepers, and penalties for unauthorized disclosure of software.

Bergsma, who was hired in May this year, assured the House that he would help them find ways on how tax problems can be addressed, the collection of delinquent tax liabilities, tax amnesty, and other ways to remedy tax problems of the Commonwealth.

Bergsma would also help the House leadership review the governor’s fiscal year 2005 proposed budget, which is now with the Committee on Ways and Means.