By Gemma Q. Casas
Variety News Staff

GOVERNOR Benigno R. Fitial has vetoed a bill that will reduce by 1 percent the 3.7 percent user’s fee paid by garment manufacturers, saying the measure is “too little and too late.”
Fitial, a former executive of the island’s garment magnate Willie Tan, said House Bill 15-207 will only result in a further decline of the cash-strapped government’s steadily shrinking revenues.
“I am keenly aware of the problems facing the garment industry in the commonwealth,” Fitial said. “However, I cannot approve this legislation reducing the user fees to be paid by our garment factories. At this time of severe economic need, the commonwealth cannot afford to reduce this important source of revenues for the CNMI,” said Fitial in his veto message to the Legislature.
“To some extent, this bill is too little and too late,” he added.
Speaker Oscar M. Babauta, Covenant-Saipan, is the bill’s author.
Since the liberalization of international trade rules in 2005, the number of garment factories on Saipan has steadily declined.
From 34 factories in 2000, only 13 remained on Saipan as of April and a few more are expected to fold in the months ahead.
The uncertainty regarding the possible federalization of local minimum wage and immigration laws may convince the remaining garment factories to relocate, Fitial said.
“It is the present uncertainty regarding a potential increase in the minimum wage level and possible takeover of immigration that primarily concerns factories still doing business in the commonwealth and their customers,” he said.
The local garment industry is exempted from paying the business gross revenue tax.