Tracy Norita
THE revenue shortfall in the second quarter of fiscal year 2024 was lower than anticipated, according to Finance Secretary Tracy B. Norita.
In her report to Senate President Edith Deleon Guerrero and Speaker Edmund S. Villagomez on Wednesday, Norita said there were “significant collections [at] the end of the second quarter,” so the projected 22% shortfall of $17 million, was down to 5% or $4.1 million.
She said tourist arrivals in February and March increased by 50% and 30% compared to the same months last year, and there was a “modest recovery of local economic activity” in the second quarter of the fiscal year.
Norita said a total of $1.5 million or 80% of the hotel occupancy tax collection has been disbursed to the Marianas Visitors Authority Trust Fund.
According to MVA data, tourist arrival rates are still below their pre-pandemic levels.
In her report, Norita said, “The continuing efforts of the Tax Collection Task Force and the Division of Revenue and Taxation’s Revenue Management & Information System have “strengthened” her department’s enforcement capabilities, “exceeding collections in the income taxes category for the second quarter by 15% or $3.4 million including business gross revenue tax, and increasing penalty and interest collections by over $560,000 for the second quarter.”
Finance collected $78.5 million as of March 31, 2024 or 5% lower than the forecast of $82.6 million.
For income taxes, Norita said, “We’ve exceeded our cumulative revenue forecast by 8%.” Finance noted “a significant jump in collections of penalties and interest from delinquent taxes due to the efforts of our collection task force team in collecting prior years unpaid taxes.”
She said the forecast penalties and interest totaled $210,422, but the actual collection in penalties and interest from delinquent taxpayers amounted to $890,099.
As for the hotel occupancy tax and the non-aviation fuel tax, Norita said the forecast was exceeded by 18% and 42%.
She said the CNMI government’s collection of amusement machine license fees also exceeded the forecast by 52%. The forecast was $2.6 million while the actual collection was $3.9 million.
However, she added, this increase in collections was offset by the overall revenue shortfall in other tax areas such as excise taxes, resulting in an overall revenue shortfall of 32% in other taxes.
In February, Norita said the CNMI government’s total tax and fee collections for the first quarter of fiscal year 2024 fell short of projected revenue by $5.3 million or over 12%.
