By Nazario Rodriguez Jr.
Horizon news staff

The House of Delegates passed on third reading Tuesday with a vote of 15-0 Senate Bill 7-117, which seeks to amend the law to add a definition of the term ‘Ad Valorem’ as used in calculating import tax.
Based on the report of the Committee on Ways and Means and Financial Matters, the current tax law does not define ad valorem thus to calculate import tax the question is whether to apply FOB price-cost of the item when placed into cargo destined for the national government or the value of the item inclusive of cost of freight and insurance.
The committee said that proposed definition would clarify the term ad valorem in accordance with existing, longstanding practice on the price of items imported not including insurance, freight or others associated with the cost of transportation.
The committee said this definition would better clarify the taxing system therefore no unnecessary taxation will be passed on to consumers as an increase of price of goods.
The Committee, which is chaired by Antonio Bells, said that the Committee found that in Noember 2005, the Division of Revenue, Customs and Taxation begun a process of promulgating regulations that would incorporate a new definition of Ad Valorem that would include the cost of insurance and freight within the Ad Valorem price of goods being imported.
The committee said that SB 7-117 is necessary to ensure that a clarified definition is established and keep prices of goods stable, which it said is a fair amendment to the current tax law.
Also during the opening of the ninth regular session of the HOD, three other bills were passed on first reading.
These include extending expiration date of Lands and Survesys and Land Court; to amend the law to allow for darker tint on side and back vehicle windows; and to amend the law to clarify the intent of the Protected Areas Network to endorse the Micronesai Challenge, to provide financing provisions of the PAN and to implement aconservation arrival fee for the financial sustainability of the PAN.