CDA likely to approve $22M tax breaks for Laulau

Commonwealth Development Authority acting executive director Oscar Camacho yesterday disclosed that the board most likely will approve on Tuesday the proposed changes in Saipan Laulau Development Inc.’s qualifying certificate after no one submitted comments on the proposed regulation.

Last Dec. 1, CDA published in the Commonwealth Register the proposed modification, revocation, and suspension of the QC to accommodate Saipan Laulau’s request to increase its tax rebates from $18 million to $22 million.

CDA economic development analyst Carline Sablan said yesterday that no one submitted comments during the 30-day period.

“This is a clear indication that the public supports the agency’s move to change the qualifying certificate program. On Tuesday, the board most likely will approve SLDI’s request,” Camacho said.

On Tuesday, the board is scheduled to hold a meeting on Tinian where approval of the Saipan Laulau modification request is expected.

Saipan Laulau, the owner of the Laolao Bay Golf Resort, is an affiliate company of the Kumho Group.

In an interview with Saipan Laulau president Kim Yun during the unveiling of the Laolao Golf Resort clubhouse, he disclosed that the modification request was made in consideration of the increased investment for the Laolao project—from $54 million to $70 million.

He revealed that one major phase of the Laolao project was the completion of the clubhouse, which costs $50 million. Other components of the project include villas, golftel tower, and a golf course.

However, the target date to complete the project, which is end of 2009, may be affected because of the depreciation of the Korean won, Kim said.

Yesterday, Camacho and Sablan said “changes in the investment amount” of Saipan Laulau was never brought to CDA’s attention when it submitted its request for modification.

CDA, in consultation with the Finance Department’s Revenue and Taxation, stated that the proposed amendments to the QC rules and regulations were formulated to restate, enhance and clarify the existing regulations and are necessary to effectively carry out the intent of the Investment Incentive Act of 2000, which created the QC program.

The proposed amendment stated that the CDA board may recommend the modification of QC for those in compliance and may suggest suspension or renovation for those non-complying beneficiaries.

The governor has 45 days to approve or disapprove CDA recommendation.

The modification is only available and only applies to timely modification requests made on or after October 1, 2008.

Saipan Laulau is the first company to benefit from the new regulation.