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Interior said ‘sympathetic’ to NMI on FICA issue
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Posted on Jan 29 2012
The CNMI government and businesses have found an ally in the U.S. Department of the Interior, which is “sympathetic” to requests of continued federal tax exemptions for Filipino and Korean workers with Commonwealth-only worker status.
Interior Assistant Secretary for Insular Affairs Tony Babauta said the Interior hopes that the U.S. Department of Treasury will reconsider issues raised in the application of Federal Insurance Contribution Act taxes in the CNMI.
“Hopefully they are listening to the points that we’re raising about the application of FICA and how at least at this time it is to the detriment of the economy of the CNMI being able to continue recovering and develop,” Babauta told reporters minutes after arriving at the Saipan International Airport to accompany U.S. Supreme Court Associate Justice Sonia Sotomayor.
The Fitial administration and the Saipan Chamber of Commerce are opposed to lifting the exemption from Social Security and Medicare taxes among Filipino and Korean workers with CW status.
The CNMI government recently sued the U.S. Treasury and U.S. Internal Revenue Service to stop the imposition of FICA on these workers. It’s yet to known what impact, if any, this lawsuit will have on the ongoing talks between the Interior and U.S. Treasury.
Babauta, in a separate interview, said besides accompanying Sotomayor to the CNMI, he will also follow up on the Forum on Economic and Labor Development grant that Interior awarded to help develop an economic revitalization program and train U.S. citizens.
Babauta said he will meet with the recipients of the FELD grant and see how the CNMI government has been using the grant money, among other things.
This is a one-time grant from OIA’s existing technical assistance and other scarce resources.
