THE number of government-issued business licenses in the CNMI had dropped annually from fiscal years 1994 to 1998, data from the Department of Finance’s Business Licensing Section showed.
While the number of business licenses has started to increase slowly between 1999 and 2001, government officials and private businesses say the steady drop in business gross revenues show that the economy is still in bad shape.
“You can have a lot of business licenses in the CNMI, but then if the economy is really bad, your revenues would not be as good as you expected it,” said Wilmer R. Sablan of the Business Licensing Section.
From 14,633 business licenses in 1994, the figure dropped to only 7,449 in 1998.
Sablan said the Asian economic crisis and lack of feasibility studies played a major role in the decline.
The number of business license applicants dropped by 1.8 percent, or from 4,248 in FY 2000 to 4,169 in 2001.
In 1996, the figure stood at 4,019. It went down to 3,732 in 1997 and further dropped to 3,415 in 1998.
It went up to 3,628 in 1999 and 4,248 in 2000, before dropping again in 2001.
Sen. Ricardo Atalig, R-Rota, yesterday said the government should help stimulate the economy.
Atalig, who chairs the Senate Committee on Resources, Economic Development and Programs, said this can be done by inviting more tourists to visit the CNMI and pumping more money into the Marianas Visitors Authority for tourism promotion. There should also be more trade missions overseas and more incentives for investors like the Qualifying Certificate Program, officials said.
In 2001, 2,557 of the total 10,864 business licenses are for retail trade.
Real estate/rental/leasing activities accounted for 1,614 of the business licenses.
Former Saipan Chamber of Commerce President Efrain F. Camacho, president of EFC Engineers & Architects, said the government needs to revisit laws that govern businesses, “and get rid of complex ones and those that don’t make sense at all.”
“Another problem is that how could you encourage businesses to invest or to have confidence in our economy when the government enacts a law today and amends it tomorrow?” said Camacho.
Camacho added that the CNMI lacks a stable tax base.
Taxes in the CNMI are based on goods produced and sold, as well as wages.
“These are easily influenced by external forces. The CNMI also needs tax restructuring to lure businesses,” he added.
Ed Salas, general manager of Niizeki International Saipan Co. Ltd., said consistency in business and economic laws plays a critical part.
“The private sector is always ready to help improve the CNMI, but we also need the help of the government,” said Salas.
The CNMI’s business gross revenues dropped by $110 million or 19.5 percent between Oct. and Dec. 2001, compared to the same period in 2000.
This reflected the effect of the Sept. 11 terrorist attacks on the commonwealth economy.
