THE CNMI government’s revenue shortfall went down to $3.4 million in the third quarter from $4.1 million in the second quarter of fiscal year 2024, Finance Secretary Tracy B. Norita said in her quarterly financial report.
In the first quarter of the fiscal year, from Oct. 1, 2023, to Dec. 31, 2023, the revenue shortfall was $5.7 million.
The second quarter covered the period from January to March 2024, while the third quarter covered the period from April to June 2024. April 15, 2024, was the deadline to file 2023 tax returns and settle any tax obligations.
In her report to the Legislature dated July 31, 2024, Norita said during the third quarter, the overall collections surpassed the revenue forecast by 2%, an excess of $695,082. The revenue forecast for the third quarter was $41.3 million, but the actual revenue collection was $42 million, she added.
Norita said while challenges remain, “notable increases” were observed in business gross revenue tax, wage and salary tax and personal Northern Marianas Territorial Income Tax revenues. She said these gains can be attributed to “increasing economic activity and concerted efforts of the tax collection task force and the successful implementation of Revenue & Taxation’s revenue management and information system.”
Norita said the system “has notably enhanced” Finance’s enforcement capabilities, resulting in an “18% increase in income tax collections for the third quarter alone, amounting to $4.5 million.”
She said that as of June 30, 2024, the government’s cumulative collections totaled $120.5 million. The forecast was $124 million, resulting in a cumulative shortfall of $3.4 million or 3% of total revenue prior to transfer out.
Of the $120.5 million in collections from Oct. 1, 2023, to June 30, 2024, Norita said they had identified $86.4 million available for appropriation, compared to a forecast of $89.6 million.
But Norita said there was a “significant jump” in collections of penalties and interests from delinquent taxes “due to the efforts of the collection task force in collecting unpaid taxes.”
For the hotel occupancy tax, Norita said their forecast was exceeded by 11%. However, she said, the increase was offset by the overall revenue shortfall of collections in other taxes such as excise tax, resulting in an overall revenue shortfall in other taxes of 30%.
On Tuesday, she told the Senate Fiscal Affairs Committee: “We are not seeing too much collections like the hotel occupancy tax. We are still seeing challenges in the excise tax for the imports, which again, is an indication of the small businesses’ inability to import goods.”
As for amusement machine license fees, her report said the collections exceeded the forecast by 13%. The forecast was $3.9 million, but the actual collection was $4.4 million.
As of June 30, 2024, Norita said the government had remitted $23.8 million in minimum annual payment to the NMI Settlement Fund.
Her report also mentioned the payment of $596,289 to the Commonwealth Healthcare Corp. for the Health Network Program or medical referrals; $21.3 million to the Public School System; $6.8 million for the retirees’ 25% benefit; and $414,524 in disaster expenditures.
Norita likewise reported that $3.8 million in hotel occupancy tax collections had been provided to the Marianas Visitors Authority.
