THE Commonwealth Development Authority is cautious on granting tax incentives to existing businesses as it would affect the government’s projected revenues.
CDA Board Chairman Juan S. Tenorio said the agency is “doing a very careful study” on the pending applications of two business entities, Tinian Dynasty Hotel and Casino and Hard Rock Cafe, for tax relief under the CNMI government’s Investment Incentive Act.
In an interview, Tenorio said the government can afford the granting of tax incentives to hurting businesses as embodied in the law. But he admitted that new companies would have bigger chances compared to the existing ones.
“Yes, the government can afford it but we have to be very careful too as to the type of businesses. For instance, these two entities have tax base already because they have been operating in the last three years,” he said.
“Part of their taxation is in the budget so we have to look – if we take it, is the economy moving forward or not? So there are many factors being considered here than a new business coming in,” he said.
In general, Tenorio said, the government’s tax base has decreased tremendously.
