BY not paying the correct gross revenue tax to the government since the effectivity of the law creating the Commonwealth Telecommunications Communication, Verizon Micronesia saved over $400,000 based on CTC’s “conservative estimate.”
CTC officials, in an April 8 letter to the House Committee on Public Utilities, Communications and Transportation, supported the passage of a measure which seeks to raise the tax paid by the telephone company to the government.
Committee Chairman Joseph P. Deleon Guerrero, R-Saipan, introduced H.B. 13-33 which seeks to amend section P.L. 12-39 or the law that created CTC to be able to increase Verizon’s gross annual revenue contribution rate from 0.5 to 2.5 percent.
The lawmaker explained in his bill that the 2.5 percent “was the historical and intended rate” that should have been followed by Verizon. The 0.5 percent rate, he said, was a “result of a typographical mistake.”
“This action is necessary because an error in P.L. 12-39…policy direction. (Before its passage) it was thoroughly debated and in fact the idea of creating a CTC had been debated in the…House and (in the) Senate for many years. Nowhere in the debate was there any policy direction from either body to reduce the contribution to the commission from affected telecommunication companies from 2.5 to 0.5 percent. In fact the provision was drafted in error,” CTC said.
CTC also said Verizon’s proposal to include a provision in H.B. 13-33 that will pass on the fees to consumers should not be considered.
The commission argued that if this provision would be enacted, then “Verizon or any other companies licensed to provide service would not pay any operating fee.” Instead “it would be the consumers of the CNMI who would pay.”
CTC added: “This is not fair and well outside the spirit and history of the telecommunications regulation.”
Tony Mosley, Verizon’s acting general manager, said that the company “is not opposed” to the 2.5 percent rate proposed in the bill.
“Verizon is not opposed to a fee to fund a regulatory body. In fact, it is vitally important for the CNMI to have a telecommunications function to support future growth initiatives in telecommunications,” he said.
He said Verizon has been paying tax based on the 2.5 rate since the late 1970s.
