A TAX increase that would force businesses to shut down will not result in more government revenue, Senate Floor Leader Corina Magofna said on Thursday.
During a Senate Fiscal Affairs Committee meeting, Magofna, the vice chair, said she wanted to see “some kind of analysis that substantiates” the proposal to impose an excise tax on imported betel nut and lime.
During the meeting, the committee also heard comments from members of the community regarding House Bill 23-41, which one of them described as “racist” because it “targets” Chamorros, Carolinians and other Micronesians who chew betel nut.
Introduced by Rep. Marissa Flores, the bill would impose a $5 excise tax per pound of imported betel nut or fractional equivalent, and 5 cents per ounce or fractional equivalent of imported lime mix.
Commonwealth Cancer Association Interim Executive Director Lyn Tenorio and cancer survivor Claudine Atalig testified in favor of the bill, but Crispin M. Sablan, who sells betel nut, opposed it.
Magofna, for her part, said they should hear from other members of the business community who will be affected by H.B. 23-41, to determine whether or not the objective of the bill will actually be met.
Magofna said she understands the intent of the bill, which is to generate revenue for the government. She said she is not against the bill’s intent, but noted that they may not achieve its aim by imposing a substantial tax.
“What kind of analysis do we have to show that by increasing the excise tax on betel nut, it would not harm and put the businesses in jeopardy?” she asked.
If these businesses shut down, then “that completely defeats the purpose” of the bill, she said.
Sen. Karl King-Nabors offered a motion to table H.B. 23-41. All three committee members present voted yes.
The committee chair, Senate Vice President Donald Manglona, said they will obtain additional calculations. He tasked Senate fiscal analyst Dave Demapan to come up with different tax rate options that the committee will consider when they meet again.
Support CCA
Claudine Atalig, who was diagnosed with oral cancer in May 2021, urged the committee to approve H.B. 23-41. If the bill goes through, she said a percentage of the revenue should be allocated to the Commonwealth Cancer Association, which provided assistance to her and continues to assist other cancer patients.
As a non-profit group, CCA operates on limited funds, she added.
“I am well aware that by supporting this [bill], I will be criticized,” she said, but added that “we need to support and serve our indigenous community. Slowly, cancer is claiming our people. I am here as evidence that betel nut is a carcinogen. It is proven and is a fact. Let’s collaborate, let’s start saving our own people,” Atalig said.
CCA Interim Executive Director Lyn Tenorio said there is a rise in cancer cases in the CNMI.
“We have an escalating need for funds and that is just for oral cancer,” she said. If H.B. 23-41 becomes law, she asked the committee to “please give CCA a portion of the excise tax revenue.”
Not true
Businessman Crispin M. Sablan said he opposes H.B. 23-41 and disagrees that betel nut causes oral cancer. “That is not true,” he said.
“This is a racist bill, specifically targeting the Chamorros, Carolinians and Micronesians who use [betel nut] daily. It’s not their [the statesiders’] thing, it’s our thing,” he added.
Sablan said betel nut is a traditional commodity and that has been used by Chamorros and Carolinians for centuries.
But he acknowledged that betel nut is also consumed with other substances like tobacco, which contains toxic chemicals that are cancer-causing.
Sablan said he is not against generating revenue for the government, but imposing “such a huge percentage of excise tax is ethically wrong and unreasonable.”
“This is a racist bill,” he reiterated, “and an outrageous punishment for our local consumers. … I don’t appreciate anyone who doesn’t understand my culture treating the food that I eat daily as something that is gross and bad,” he added.
Sablan told the committee members that as elected officials, “you guys are here to speak for us, make laws and fight for us.”
“I’ve been very clear. [Stateside] Americans don’t appreciate … betel nut chewing because they think it’s gross. Let’s not hide under the table. … Let’s bring it out and talk about this. We are the only U.S. citizens that enjoy chewing betel nut,” Sablan said.
He recommended that the committee conduct an online survey through the local newspapers and allow the local community to express their opinion regarding the bill.
He said should the committee decide to act on the bill, lawmakers should be fair to those who sell betel nut. He said the proposed $5 tax per pound should be reduced to 50 cents.
He said the committee should also find “other avenues” to generate revenue for the government. These include ensuring that all businesses in the Commonwealth are complying with current tax laws.
“We need a tough special task force to assist businesses to comply with our tax laws,” Sablan said.
