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Customs, CHCC quizzed on bill to increase tobacco revenue
The Ways and Means Committee of the House of Representatives met yesterday with the Customs Division and Commonwealth Healthcare Corp. to incorporate language to clarify the intent of a bill that proposes to amend the CNMI Excise Tax laws to increase revenues by taxing tobacco products.
Customs director Jose Mafnas and CHCC special assistant for Policy, Sustainability, and Development Kaithlyn Neises-Mocanu were the resource persons invited to the meeting. House Ways and Means Committee chair Rep. Ivan A. Blanco (R-Saipan) said they also solicited input from the Office of the Attorney General, Department of Finance, and Saipan Chamber of Commerce.
Blanco said the committee will continue its deliberation on Sept. 10 at 10am in the House’s chamber.
House Bill 21-20, introduced by House floor leader Rep. John Paul P. Sablan (R-Saipan), states that the CNMI’s current definition of “cigarette” under its excise tax laws allows for certain tobacco products to escape taxation by being classified as “cigars” when, in fact, the products are more like cigarettes.
Sablan said these tobacco products are generally labeled as “cigars” or “filtered cigars” but, upon inspection, they are similar to cigarettes as they contain filters and may also be flavored.
He said the CNMI has lost significant tax revenues by allowing these “cigars” or “filtered cigars” to be taxed as cigars based on the labelling of these products.
Last April 23, the CNMI hosted a Fiscal Response Summit attended by leaders of various organizations and agencies in the public and private sectors. That summit generated other revenue-generating proposals that the CNMI could pursue.
Finance Secretary David Atalig said it’s estimated that by implementing new rates and taxes, gross government resources can increase by $15.5 million. Atalig said the summit’s proposal to impose a $1 increase on cigarettes (tobacco) products will have an estimated increase in revenue of $2.92 million. (Ferdie de la Torre)
