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‘Repeal developer’s tax to boost investments’
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Posted on Nov 14 2008
A local architect is backing a tax abatement proposal that has been introduced in the Legislature, saying it will encourage development in the commonwealth.
Herman B. Cabrera, who runs his own architectural firm, called the 2-percent developer’s tax is “a product of greed.” He said that many developers are turned off by it.
“When the developers see these prices together with the building permit fees, they turn down their projects in the CNMI. They point out that if the 2 percent developer’s tax is eliminated, they will still be giving multiple contributions to the CNMI from the start of design, construction, to the operation of the business,” Cabrera wrote in a letter to the House Committee on Commerce and Tourism.
One example of such an investor, he said, is the company behind a proposal to build a cable car up Mt. Tapochao. Cabrera disclosed that he is working on the project called “Top of the World Cable Car.” But the investor, which he did not name, is unsure whether to pursue the project because of the 2-percent developer’s tax charged by the CNMI government.
“Saipan will lose this project, which will greatly contribute multiple benefits to the CNMI. The cable car project is the type of establishment that will promote tourism to our island,” he said.
Cabrera’s statement follows the recent introduction of a House bill to establish an “economic stimulus investment program” in the Northern Marianas. Similar to the existing qualifying certificate program, the incentive plan offers tax abatement for new investments. The proposed legislation will require the Department of Commerce to grant tax relief for new investments of at least $5 million for a one-time period of three years.
Sponsored by Rep. Joseph Reyes, the proposal has received largely favorable response from the business sector. The Saipan Chamber of Commerce, Rota Resort & Country Club, and Bridge Investment Group, which is proposing a multimillion dollar casino resort on Tinian, are among those that have submitted letters of support for the bill.
