ACTING Gov. Diego T. Benavente says he supports the granting of tax incentives to Tinian Dynasty Hotel & Casino.
In an interview, Benavente said he has not fully studied the recommendation made by the Commonwealth Development Authority but he favors the idea of assisting a “hurting” business.
He said he believes that Dynasty would eventually be able to pay its dues to the government when it becomes financially capable.
Authorities said Dynasty has a huge debt to the government mainly for failure to pay its taxes properly.
“We’re giving them an opportunity to make the business work. When we allow that, once we give them an opportunity to be successful on Tinian, we’ll see a lot of revenue coming in,” Benavente said.
CDA earlier recommended to the Office of Governor to grant Dynasty tax abatement privileges for 10 years.
For the first three years, Dynasty would enjoy a 100 percent tax abatement in business gross revenue and 50 percent in bar taxes.
For the next four years, a 50 percent tax abatement would be extended.
In the last three years, the amount would be lowered to 30 percent.
Benavente said he was “concerned” about the impact on the government’s revenues, but added that the government was not receiving a lot from Dynasty anyway.
“At this point, their inability to keep or make payments on the taxes we’re attempting to exempt them from is (one of) the reasons for (giving them tax breaks). We’re not receiving a lot of that money at this point,” he said.
He said the government’s “sacrifices” would eventually pay off.
The Saipan Chamber of Commerce is also supporting CDA’s recommendation.
Although the tax exemption would be a “bitter pill to swallow” for other businesses, the Chamber said it would prove beneficial in the end.
The Chamber had opposed a proposal that seeks to grant excise tax abatement to businesses, saying that the government desperately needed additional revenue.
At least three other businesses hope to get tax incentives from CDA—Hard Rock Cafe, the Hyatt Regency Hotel and SEPC (Rota) Spring Water, Inc.
The Investment Incentive Act, or P.L. 12-80, grants tax relief of up to 100 percent for a maximum of 25 years to tourist-related businesses that invested in the CNMI three years prior to 2000.
