In his letter to the measure’s author, Rep. Stanley T. Torres, Ind.-Saipan and chairman of the House Committee on Commerce and Tourism, chamber president Douglas Brennan said the bill “would in fact further decimate an economy already in recession.”
“Increases in the cost of doing business in the commonwealth would have a net negative effect on business activity, consumer pricing, actual revenue generated by the proposed increases and jobs in the commonwealth,” he added.
The bill stated that there is a necessity to reduce expenditures and increase revenues.
But the chamber would like to find out if the Legislature itself has reduced its own expenditures.
According to Brennan, the chamber is endorsing “the legitimate need” to pare down the size of the Legislature as has been proposed by Rep. Joseph M. Palacios, R-Saipan.
The chamber described as unenlightened and inflammatory H.B. 17-212’s finding “that the burden of adjusting to the current level of available resources should be shared by all members of the economy and not placed on only one group.”
Brennan said the business community has already endured enough in trying to “adjust to its current level of resources” due to the increased power costs, fuel costs, labor costs, labor access, material costs, commodities costs, market competition, fewer consumers as the population decreases and several other business expenses that lawmakers need to be aware of, understand and appreciate.
Brennan said H.B. No 17-212 is “conceptually unsound and unintentionally counterproductive” in light of the “prolonged economic recession.”
He said the Legislature should focus on reducing government expenses and should “think, act and protect itself like we in the business community have been doing for years since this recession began.”
“[Only then] can [we] act like we really are sharing in this economic burden,” he added.
The bill claims that increasing the maximum tax on gross revenues from 5 to 6 percent will result in a minimal price increase which the chamber found “suspect”
Brennan said the chamber “would inquire as to the economist that provided that calculation.”
The bill likewise proposes increasing taxes on individuals in the CNMI, which the chamber also does not support, Brennan said.
The chamber, he added, does not support the imposition on every person in the CNMI a yearly tax through changes in the personal income tax outside of existing individual income tax structure and law.
Regarding the bill’s proposed tax on agriculture and fishing, Brennan said the chamber does not support any additional taxation on industries that have been identified as “replacement industry revenue producers” until, at least, they are viable and established in the CNMI.
“We are rebuilding an economy, not trying to hinder its reestablishment,” he said.
The chamber also objects to the bill’s proposal to increase the taxes on manufacturers and wholesalers.
Brennan said manufacturing creates jobs, and wholesale activity further expands business activity, so they should be taxed as little as possible to establish economic stability.
The chamber also believes that any tax increases on agriculture and fishing should be avoided “until such time the CNMI has rebounded and is economy is healthy again.”
