Tinian Mayor Edwin P. Aldan speaks during a Tinian and Aguigan Legislative Delegation session in the Senate chamber on Monday.
MAYOR Edwin P. Aldan is urging the Department of Public Works to review the costs of construction activities on Tinian so the Department of Finance can collect the developer infrastructure tax. He described the tax as a “significant source of revenue that our municipality must capitalize on to address pressing infrastructure needs.”
Public Law 8-23 or the Developer Infrastructure Tax Act of 1993 imposes a 2% tax on the total costs of a construction project.
The law requires DPW, through its building safety official, to verify the total cost of a project, which will determine the amount of developer tax that can be collected. Once the developer tax is paid to the Division of Revenue & Taxation, DPW can issue a building permit.
In his letter to DPW Secretary Ray N. Yumul on Thursday, Aldan said there is a “critical need to assess and enforce the developer tax, as mandated by CNMI law, on construction projects related to military developments on Tinian. This tax, which imposes a 2% levy on developers, represents a significant source of revenue that our municipality must capitalize on to address pressing infrastructure needs.”
He said the tax “is designed to be collected on the cost of development projects, contributing to the funding of public infrastructure and improvements that are necessary to support the growth and changes brought by such developments.”
“As you are aware,” he added, “Tinian is currently experiencing considerable military activity, including projects such as the Divert Airfield at West Field and the proposed Commonwealth Joint Military Training activities. These projects involve extensive construction efforts, impacting our island’s infrastructure and resources.” Aldan said.
Despite the “immense scale” of military construction activities, Aldan said “our municipality has yet to benefit from the developer tax revenue.”
The Divert Airfield project alone, the mayor said, “represents a multi-million-dollar investment.”
Additionally, he said, the proposed CJMT project will bring in more significant development projects.
Based on preliminary cost estimates, the total expenses for these military construction projects are projected to reach hundreds of millions of dollars, Aldan said.
Assessing a 2% tax on these expenditures, the mayor said, “could yield substantial revenue for Tinian.”
“It is imperative that we enforce the collection of this tax from contractors engaged in these military construction projects,” Aldan said. “The revenues generated are urgently needed to address our island’s infrastructure challenges, particularly in maintaining and upgrading our roadways and enhancing our water resource systems. As Tinian continues to be a focal point for strategic military initiatives, our community must have the means to support the demands placed on our infrastructure and ensure the well-being of our residents,” Aldan added.
Yumul, in an interview, said he has informed Aldan that DPW is looking into the mayor’s request.
