BY a vote of 7 to 2, the Senate on Wednesday passed an amended version of House Bill 23-74, which would impose a 3% tax on construction activities.
Senate President Edith Deleon Guerrero and Sen. Dennis Mendiola cast the dissenting votes. Those who voted yes to the new version of the tax bill were Senate Vice President Donald Manglona, Senate Floor Leader Corina Magofna, Sens. Celina Babauta, Karl King-Nabors, Frank Q. Cruz, Jude U. Hofschneider and Paul A. Manglona.
The bill now goes back to the House of Representatives.
Authored by Rep. Ralph N. Yumul, H.B. 23-74 originally proposed to impose a 3% tax on construction activities with an expenditure threshold of $250,000. The Senate Fiscal Affairs Committee increased this threshold to $350,000.
Before the roll-call vote, the Senate president said it is not the right time to impose tax increases “when we know that there are revenue activities being realized in at least one municipality here, Tinian, for the military buildup.”
She said tax increases will ultimately affect ordinary consumers, “the people who are already suffering and can barely afford their families’ necessities.”
She added that raising taxes on a depressed economy, especially when businesses have yet to return to pre-pandemic levels, should not be the solution to the government’s lack of financial management and economic initiatives to generate new revenue. She said additional revenue is needed to fund programs such as group health insurance for government employees, medical referrals, the 25% for retirees, government operations, and other unfunded obligations, including $35.4 million in land compensation.
“Hopefully,” she said, “the revenues generated from construction activities on Tinian will result in a supplemental budget that can be submitted to the Legislature, allowing us to address financial shortfalls.”
But she reiterated that “imposing taxes on the private sector, which is the one producing revenues for the Commonwealth, is not” the right move at this time.
