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CDA is finalizing report on ‘net effect’ of QC program
The Commonwealth Development Authority is finalizing a historical evaluation of the CNMI’s qualifying certificate program since it was initiated in 2001.
This report will compare the amount of tax relief provided to QC holders versus the amount of capital and benefits they have pumped into the CNMI.
CDA QC analyst Carline Sablan disclosed that this report has been in the works and should be finalized this week.
According to her, the report will compare the “direct and indirect” benefits of the QC program to what the CNMI has given up in the form of taxes.
When asked for a ballpark estimate of these figures, CDA could not disclose this as the report is still being prepared.
Sablan said that since these are tax figures, CDA needs to be careful not single out a beneficiary.
She explained that when the report is released people would not be able to pinpoint how much a QC holder is paying out in taxes.
“That’s why we are not ready to release it yet,” Sablan said.
CDA executive director Manuel Sablan echoed this, saying that they would prefer not to “prematurely disclose” these figures.
But in describing the report, the director said, “It’s going to be very interesting.” He did not elaborate.
The CDA chief said the report is “basically a historical evaluation of how much in tax relief has been provided” by the QC program versus “how much economic generation came out of that tax relief.”
“Essentially, the QC is applying tax relief in anticipation of economic growth, investment activity. Without this QC, the question can be asked, ‘Can this investor deploy that much volumes of capital investment?’ It’d be nice to have investment without these incentives but look at Rota and Tinian, it is very hard to have investment there,” he said, noting the difficulties of interisland transportation and higher costs of products as road blocks to investment.
