Finance Secretary Eloy Inos said the cash-strapped government must generate “new money.”
“We’re going to propose some minor revenue enhancement programs that will include increase of license fees for general business activities,” he said in an interview. “We want to try it because it has never been tried before and it’s only a one shot, one-type, once a year increase for certain business activities.”
Under Public Law 3-11, the CNMI has seven business license categories that pay annual fees from $5 to $1,000 depending on the business classification.
Offshore banking pays the highest fee, $1,000, while a security dealer pays $300.
A bank pays $500; insurance company, $300; insurance broker, $100; insurance agent, $75; public utility, $300, manufacturers and wholesalers, $50; scuba diving activity and operation, $100; road side vendor, $5; general business, $50.
Inos said doubling the rates will raise $1 million a year.
“We believe that there are some rooms where we can find new money for the government,” he said. “This is not increasing the tax per se, but a one-time increase every year.”
The finance secretary said businesses are already having a hard time coping with the CNMI’s economic crisis, but he believes the fee hike will not create “big impact.”
“We will make sure that before finally presenting this proposal, we will have a dialogue with the business sector,” he said.
The CNMI collects about $500,000 a year from business license fees.
“What is this administration’s justification for a fee hike when our economy is down and businesses are hurting?” said a resident, who declined to be identified.
She noted that small businesses that will be affected by the fee hike are the ones keeping the CNMI economy going, “and not big investors that many are still expecting to come.”
