CDA acting Executive Director Oscar Camacho said House Bill 16-177 is not an advisable step to take at this time when CNMI is in dire need of fresh investments.
Rep. David M. Apatang, R-Saipan, introduced the bill following disclosures of the several problems that have developed since the program was created by the Investment Incentive Act of 2000.
The bill also proposes the creation of a qualifying certificate assessment workgroup that will evaluate the effectiveness of the program and submit recommendations to the Legislature and the governor.
“There’s no need to suspend it,” Camacho told Variety, adding that the program can be improved without suspending it.
Camacho said CDA agrees with the bill’s intent to improve the QC program.
But he said the suspension will affect businesses that have plans to avail of the program, which entitles QC recipients to tax breaks.
There are three companies that have applied for QCs, he added.
“What will happen [to them] if there’s a change in the existing law? The businesses may not come here,” he said.
But Camacho believes the creation of a workgroup to review the program is a “good idea.”
According to the bill, there is a lack of correlation between the amount of investment and the amount of tax benefits granted by the program.
But Camacho said “there should not be any correlation. You can have an investor that puts in $5 million and generate more money…than a $20 million investor. It depends on the type of business and services it offers.”
However, he added, there’s always room for improvement.
“CDA agrees that there has to be a clear direction as to what can be modified and to what extent,” he said.
The QC program generated $2.6 million in new investments out of the $305.1 million in potential investments from 2002 to 2005.
