PUBLIC LAW 12-51, which established a tax amnesty program, tremendously helped the government on its effort to collect outstanding tax revenues, according to House Minority Leader Oscar M. Babauta.
However, he says not all eligible persons and entities took advantage of the law which expired 106 days after its effectivity on May 7, 2001. Thus another amnesty measure should be passed to give a “second opportunity” to delinquent taxpayers, he said.
Babauta, Covenant-Saipan, recently pre-filed H.B. 13-88 which seeks to provide a 90-day amnesty period for the filing of delinquent tax returns. He said this “would still be the most cost-effective way for the government to collect tax revenues during these difficult economic times.”
He said the bill would be similar to P.L. 12-51 as it would encourage individuals and companies to comply with the law.
Under the bill, delinquent taxpayers would be encouraged to voluntarily state their wages, salary or earnings, gross revenue, room, bar and jackpot taxes, excise tax, income and be given the option to file a special return for all tax years prior to the 2002 calendar year.
Any person or entity who files a special return and a request for waiver of penalties and interest and pays the tax owed to the government within the prescribed period would be released from paying the following penalties and interest:
• Where a special return is properly filed and a full payment of all tax owed is made to the government, 100 percent of the penalty and charges will be waived.
• Where a special return is properly filed but payment of less than 100 percent of all tax owed, 100 percent of the penalty will be waived along with the portion of the interest attributable to the principal paid with the special return. This is provide that the taxpayer has first entered into an agreement with the director of revenue and taxation for the payment of the remaining balance of the tax and interest charges. Any agreement executed would be based on the taxpayer’s ability to pay.
Other interest due to the Northern Marianas territorial income tax would not be waived. Penalties maybe waived under the NMTIT only by showing a reasonable cause.
The proposed amnesty program would not apply to individuals who is a party to a civil or criminal tax action, being investigated for fraud or who has had a civil or criminal judgment rendered against him and has not yet paid such judgment in full.
