House Resolution 17-18 stated that although imposing tax on oil companies will generate funds for Guam, the other Pacific islands like the CNMI will be detrimentally affected because it will raise the cost of fuel here.
Oil companies use Guam as transshipment center for approximately 28 million gallons of fuel for Micronesia annually. Because it contributes to the island’s economy, the Guam government granted tax exemption to this activity.
Last June, the Guam Legislature introduced a measure proposing to eliminate the tax exemption on liquid fuels being shipped from the island, estimating that $2.6 million in revenue will be generated annually.
Noting the continuous economic decline throughout Micronesia, Dela Cruz, R-Saipan, said it is necessary for island governments to work together.
The re-imposition of the fuel tax on Guam, the resolution stated, will adversely affect the CNMI, the Marshall Islands, the Federated States of Micronesia and Palau.
