THE Department of Finance has reported to the Legislature a “modest” revenue collection in the third quarter of fiscal year 2025.
The total quarterly revenue collection for the third quarter amounted to $37.9 million. In comparison, it was $44.4 million in the second quarter and $42.3 million in the first quarter.
In her report to Senate President Karl King-Nabors and Speaker Edmund S. Villagomez on Thursday, Finance Secretary Tracy B. Norita said the cumulative gross collections as of June 30, 2025, totaled $124.6 million. This, she said, reflects modest revenue collection to date, exceeding the $121.6 million gross forecast by 3% or $3 million.
She said the third quarter gross collections were impacted by a 3% ($1.37 million) shortfall in tourism-related business activities. However, she noted that “strong” second quarter collections helped “soften” the third quarter shortfall.
Norita reported that total gross collections on income taxes reached $27.8 million, exceeding quarterly projections by 16% ($3.8 million). She attributed this performance to “strength” in the following categories:
• $15.8 million in business gross revenue tax, exceeding the $15.6 million forecast.
• $8.6 million in wage and salary tax collections, surpassing the $7 million projection.
• $2 million in personal Northern Marianas Territorial Income Tax, exceeding the $421,041 projection, largely due to individual tax filings.
• $556,843 in gaming jackpot tax, exceeding the $232,180 forecast.
She also reported that government collections from licenses and fees reached $2.1 million, exceeding projections by 2% or $31,432. Other license and fee collections totaled $1.4 million, slightly above the $1.3 million forecast.
Revenue from fees, services, and other sources amounted to $807,834, surpassing projections by 147% or $481,073. This, Norita said, was largely due to charges for services including indirect cost reimbursements and Customs, Immigration, and Quarantine overtime. These collections exceeded the $231,168 forecast.
However, she also identified underperforming categories:
– Excise tax collections totaled $5.1 million, falling short of the $9.6 million forecast.
– Hotel, bar, and beautification taxes reached $1.2 million, below the $1.9 million forecast.
– Beverage container taxes were $269,779, short of the $387,104 forecast.
Outlook
In her review of the third quarter decline in collections from tourism segments, Norita cited the Marianas Visitors Authority’s report, which noted that visitor arrivals totaled 31,707 in the third quarter. This, she said, reflected sustained pressure from airlift disruptions, particularly in the Korean and Japanese markets.
She noted that June was especially hard hit, with arrivals dropping by more than 33% compared to April and May. The report attributed this decline to significant reductions in air access from key source markets, especially Korea and Japan.
It further stated that Korean travelers, who make up roughly 75% of all arrivals, were impacted by extensive flight suspensions by T’Way Airlines due to maintenance and profitability concerns.
Looking ahead to the fourth quarter, the Finance secretary said Hong Kong Airlines is set to resume service to Saipan on Sept. 21, 2025, with twice-weekly flights. She described this as a positive development that will begin to influence visitor numbers later in the fourth quarter and into the next fiscal year.
However, she added, United Airlines has adjusted its Japan-Saipan flight schedule in ways that make the route less appealing to Japanese visitors, potentially lowering conversion rates from this important market.
