Senate committee tackles bill to remove 30-day grace period in paying excise tax

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THE Senate Committee on Fiscal Affairs on Wednesday met with Customs officials and asked questions about the bill that proposes to remove the 30-day grace period in paying the excise tax.

Two weeks ago, the House passed House Bill 21-104, which according to Customs Director Jose Mafnas would help the agency collect from short-term or one-time importers, some of which are “high-risk” importers for customs violations.

Senate Floor Leader Justo Quitugua told the Customs officials that he likes “honest businesses that pay their taxes.”

But he said the measure would give the Customs director discretion to consider requests or accommodate long-term importers who are considered “low-risk” risk for customs violations.

“What if you are no longer there and the new director will have his own way of implementing the regulation? What’s going to happen?” Quitugua asked Mafnas.

Mafnas said the measure would address Customs’ “frequent challenges” in dealing with undervalued and undeclared imports.

Senate Floor Leader Justo Quitugua, fourth left, speaks to Customs Director Jose Mafnas, second right, during the Senate Fiscal Affairs Committee meeting on Wednesday. Also in the picture are the committee chairman, Senate Vice President Jude Hofschneider, fifth left, Sen. Teresita Santos, second left, Sen. Vinnie Sablan, third left, Senate legal counsel Antoinette Villagomez, fourth right, Senate legislative assistants Jolyn Tagabuel and Alexis Hofschneider, Customs compliance officer Bob Reyes, third right, and Saipan Chamber of Commerce executive director Maxine Laszlo.  Photo by Emmanuel T. Erediano

The Commonwealth, he said, is losing revenue because of violators.

Quitugua said businesses should be required to obtain a clearance from Customs when renewing their business permits or paying their gross revenue taxes. This way, he added, importers who have outstanding obligations can be easily tracked down.

Mafnas said he likes the idea, but added that there are importers who change their business names, address or just disappear from Custom’s “radar.”

Mafnas supports the passage of the bill, which was introduced by House Floor Leader John Paul Sablan.

Mafnas earlier told House members that over 100 importers had exceeded the 30-day grace period for the payment of excise taxes amounting to $120,000.

He said this is one of the main reasons for eliminating the grace period.

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