Inos belies 40-year tax break for BSI

Gov. Eloy S. Inos finally got a chance to address one of the allegations thrown at him during the general and runoff elections, which claimed that his administration gave exclusive Saipan casino licensee Best Sunshine International Ltd. a sweetheart deal by exempting the company from paying taxes for 40 years.

“Someone should read the law. The only thing they had a break initially is when they asked for total tax exemption. The negotiators didn’t go for that and instead they compromised,” he told Saipan Tribune Saturday, a day after he and his running mate, Senate President Ralph DLG Torres (R-Saipan) garnered a 1,599-vote lead against independent candidate Heinz S. Hofschneider and his running mate, Ray N. Yumul.

Inos said accusations from the opposing camp of a 40-year tax holiday for BSI are unfounded.

“The only tax break that Best Sunshine gets is on the income tax side and it’s only on the first $15 million in taxes. That $15 million sounds like a lot of money and it is but that’s against hundreds of millions of dollars in income and in revenue.”

Besides income tax, BSI would also be paying a slew of local taxes like business gross receipts tax or BGRT, excise tax, alcohol and beverage tax, hotel occupancy tax, and all the other taxes that would go directly into the government’s coffers, he said.

In addition, Inos said, BSI would also need some 9,000 workers to operate its $7.1-billion integrated casino resort development.

“At one point, they said they needed 5,000 workers but their business model changed and the amount of investments is now $7.1 billion and they said they now need 9,000. The main thing here is almost everybody on this island who’s willing to work and able to work should have a job.”

Inos said he is aware that the islands may not have 9,000 workers available for BSI and that’s why the subsidiary of Imperial Pacific International Holdings Ltd. is expected to work with U.S. Citizenship and Immigration Services to address the issue.

“They were made aware of the challenges on the labor side. They’ve hired consultants to help them with USCIS on the H1-B1 visas,” he said.

Last week, BSI president and CEO Mark A. Brown accused the Hofschneider-Yumul camp of politicizing the company’s intentions in the CNMI. Brown was upset over two full-page ads in both newspapers tying them in claims against gubernatorial candidate Inos.

One advertisement accused Inos of distributing the $10 million utility vouchers—provided by BSI under a contracted Community Development Fund—a day before the election to swing votes. The other ad, asking “Who Benefits?” essentially claimed that BSI would pay no taxes for the next 40 years.

Inos said everything BSI is providing to the CNMI and its residents are mandated by the Aug. 13, 2014, Saipan casino license agreement between Imperial Pacific and the CNMI Lottery Commission.

Under the Community Benefit Fund, Best Sunshine was obligated within 60 days of the issuance of the exclusive Saipan casino license to provide $10 million in the form of “Commonwealth Utility Company” vouchers.

Other components of the Community Benefit Fund is that within 60 days of commencing construction work on the first hotel in the casino project, Best Sunshine should contribute $20 million to “education, scholarships, infrastructure, health care, or employee retirement benefits.”

In addition, under the Saipan casino license agreement, Best Sunshine is required “upon the first full year of operation” to annually contribute $20 million for community benefit programs (education, scholarships, infrastructure, health care, and employee retirement benefits).