REPRESENTATIVE Ivan Blanco will introduce House Bill 22-25, which would provide relief to CNMI taxpayers affected by typhoons and the Covid-19 pandemic.
Ivan Blanco
The measure is similar to previous tax amnesty laws that have already expired, he said.
But the bill “shall not apply to any business engaged in gambling, including but not limited to e-gaming, poker, casino enterprises.”
Blanco said his bill is necessary “in light of the successive disasters over the span of the last years, and the suffering and burden that these disasters have caused our citizens and business community.”
Special consideration should be given when providing tax relief, such as a waiver or cancellation of penalty and interest charges for late tax remittances or late filing of tax returns, Blanco said.
“Such legislative response is appropriate and necessary in the CNMI’s rebuilding process and [to] accelerate economic growth,” Blanco said.
He added that unlike U.S. tax law, which allows deduction for disaster/casualty losses, H.B. 22-25 “is not seeking revenue or income deduction. It only seeks relief of penalties, and to a certain extent relief on interest charges on the tax principal paid within the specified time period.”
The waiver of interest will promote collection of taxes, Blanco said.
Providing this waiver, he added, will likely put taxpayers in a better position to commit to rebuilding and, as a result, accelerate economic growth.
He noted that a tax amnesty program like those provided in Public Laws 12-51, 14-8, 18-29, 18-65 “was highly successful because it allowed many delinquent taxpayers to come forward and become compliant.”
According to the bill, “The citizens of the CNMI have demonstrated resiliency in the recovery efforts, but challenges continue to exist in rebuilding and in the chain reaction of economic hardship. Under these circumstances, the burden of having to divert funding sources to pay penalty and interest will prolong the suffering and hinder economic growth despite the resilience of the CNMI citizens.”
The bill stated that the “work of recovery and rebuilding is long term and the Legislature recognizes the need to support the business community in their recovery and rebuilding efforts.”
