Blanco will introduce tax relief bill

House minority bloc leader Rep. Ivan A. Blanco (R-Saipan) intends to pre-file a bill that gives tax relief to disaster-stricken CNMI taxpayers by granting them relief from penalties and interest on unpaid taxes.

Blanco said yesterday that he is already done writing the bill and that he will pre-file it this morning, Wednesday.

In an interview last week, Blanco said the government gives tax relief on penalties and interest for business people who have hard time paying off their taxes each time there is a typhoon or every disaster.

“We just went through [Super Typhoon] Yutu. There was no tax break. Now we went through this pandemic, yet there’s no tax break,” Blanco said.

Although there’s some financial assistance from the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, he said he is not sure if that’s enough.

He said his bill will propose to allow a waiver on tax penalties and interest. It will apply to all tax years prior to the 2020 calendar year. Blanco said this will encourage people who have not filed their taxes to pay their taxes and not worry about penalties and the interest.

“The window to pay is 60 days,” he said.

Blanco said there are certain businesses that they would like to look at who may not qualify for this.

He said the details will come out once he pre-files the bill most probably this week.

According to a draft of the bill obtained by Saipan Tribune yesterday, persons who are not entitled to immunity are any person against whom a criminal or civil action has been initiated and is pending for any violation of the tax laws of the CNMI or any person being investigated for fraud.

Also not covered by the immunity are any person who has been convicted of tax fraud, whose source of income is illegal, and who fraudulently files a special return under this bill.

The bill, unlike the United States that allows deduction for disaster/casualty losses, is not seeking revenue or income deduction. The bill only seeks the relief of penalties, and to a certain extent on interest charges on the tax principal paid within the specified time period.

The legislation states that the waiver of interest will promote collection of taxes as providing such waiver will likely put taxpayers in a better position to commit to rebuilding and as a result accelerate economic growth.
Saipan Tribune will publish other details in the bill once the legislation is filed.