By Mar-Vic Cagurangan
Variety News Staff

THE government of Guam loses approximately $30 million a year to tax credits and exemptions granted to specific business entities, according to Revenue and Taxation director Art Ilagan, who proposes that these exemptions be eliminated.
“We could be losing more than $30 million. That’s just our estimate. We can’t say for sure because exempted businesses are not filing taxes,” Ilagan told Variety.
“In the past, we were able to collect as much as $700 million, but in recent years, we have barely reached $400 million. We don’t have enough revenues to support our expenses,” Ilagan said.
The federal tax cuts, he added, are also taking their toll on Guam’s own revenue.
Ilagan supports the proposal of Sen. Judith Guthertz, D-Mangilao, to repeal public laws that authorize tax exemptions. He said his office is preparing the list of tax break programs that Guthertz has requested.
Ilagan said the gross receipt tax and the corporate tax are among the revenue sources heavily affected by tax relief programs.
He mentioned, for example, the Dave Santos Act, which grants GRT credits to businesses that make an annual income of under $500,000. 
“We are losing between $10 million and $12 million in the Santos Act alone. Business owners shouldn’t be getting tax credits. It’s a privilege to do business and paying the tax is a part of the cost that comes with owning a business,” Ilagan said.
While business entities keep getting tax credits, Ilagan noted that ordinary taxpayers continue to shoulder the burden of tax increases.
He recalled that when the 27th Legislature raised the GRT from 4 percent to 6 percent three years ago, the business groups that were enjoying the tax credit programs were not affected.
“The tax increase made people who were paying tax pay more tax. Those who were exempted remained exempted. The Legislature shouldn’t have raised the tax. They should list the exemptions and make everybody pay taxes,” Ilagan said.
The GRT rate was eventually rolled back to 4 percent.
Another public law grants GRT credits to vendors who sell medical supplies and equipment to the Guam Memorial Hospital. Two years ago, the 28th Legislature also passed another bill that granted GRT exemptions to business entities that contribute to the development of sports facilities at the University of Guam.
Yet another tax break bill is pending in the 29th Legislature. Introduced by Sen. Jesse A. Lujan, R-Tamuning, Bill 8 seeks “to provide an incentive to businesses that are willing to contribute to the construction, development, upgrading, repair or maintenance of village recreational and sports facilities by authorizing gross receipts tax credits of up to $80,000 per village project.”
“We can’t even afford to pay our debts. Why do we keep giving out credits?” Ilagan asked.
He said taxes that are not paid would otherwise be available to fund the Guam Public School System.
Guthertz earlier wrote to Ilagan, requesting a list of the government’s tax relief and fee exemption programs that have been made available to specific individuals, industries and business entities. 
She attributes the government’s financial mess partly to these tax relief programs.