ROTA Mayor Efraim Atalig on Tuesday said it’s “really not the right time” to impose a tax hike on tobacco as proposed by Rep. Tina Sablan in House Bill 22-54.
During a public hearing on Rota, the mayor said, “It’s a little too stiff for us. Perhaps, maybe, it can be lowered to $2 or so.”
House Bill 22-54 would raise to $4 from $3.75 the excise tax per 20 cigarettes, and impose a 75% levy on vaporizers that contain nicotine.
“I would say that the Legislature, or the House, should have been looking at other funding resources, such as the remittance that we have discussed [before], because those are funds that exit the CNMI. [They] are never going to come back. Therefore, I believe we should have some sort of tax on those remittances leaving the Commonwealth,” the mayor added.
In 2020, the Senate proposed taxing money wire transfers, but the assistant attorney general for the Division of Revenue and Taxation said it would violate the Commerce Clause of the U.S. Constitution “because it discriminates against interstate commerce,” and “may [also] violate the Equal Protection Clause of the U.S. Constitution.”
Standing on a soapbox
Regarding House Bill 22-54, Sen. Karl King-Nabors said it would “disenfranchise the people that don’t have money in our community.”
“A better approach,” he added, “would be incentivizing people to purchase items that are [healthier], reducing the costs of living to live a healthier life, as opposed to taxing what…the House deems a sin.”
He said the House is “standing on the soapbox saying, … ‘We can take that money and give it to our healthcare system.’ But I’m telling you right now, what you’re doing is not going to save our healthcare system, because you have taken a holistic problem and just brought it down to sugar and brought it down to tobacco.”
“If you’re really concerned, why not tax betel nut?” he asked. “No, they don’t want to touch betel nut, for the very same reason why we all understand that this tax is fraudulent. Because if you were truly concerned, you would take a holistic approach on this tax…. Let’s encourage people to go walk. Let’s encourage people to eat a healthy diet. Let’s figure out ways to make healthy living cheaper as opposed to taxing those products… This is not the proper way to go.”
King-Nabors said “these taxes are burdensome.”
“We are not in the position in the CNMI to take on these additional taxes at this moment in time,” he added. “That’s all I can say. That’s all I can advocate for. I’m here for reasonable discussion and discourse in regards to health and wellness, but it has to be comprehensive. We cannot just cherry-pick the data that we feel best allows us to make our decision for this one tax bill.”
Moreover, he said, “the very things we’re trying to curb through this taxation, if anything, are going to burden the people in our community that have the least, and I would just like to reiterate that as much as I can. If we’re really in the business of trying to build a better community, which I think this bill intends to do, then there are ways that we can go about it, whether we encourage fitness, whether we bring down the cost of healthy food choices in the store. There are so many other options. But no, we want to tax the people that have the least and we want to have them bear the burden to supplement our local funds through these taxations.”
Healthy living
For his part, Independent Rota mayoral candidate Al Taisacan Taimanao asked the senators to clarify how the dollar amounts of the proposed tax were calculated.
Sen. Victor B. Hocog, the chair of the Senate Fiscal Affairs Committee, said they will meet with the legislative fiscal analyst and include these discussions in the committee report.
Taimanao said there should be a compromise that would not drastically affect businesses and consumers while still promoting healthy living.
To further discuss the bill, the Senate panel scheduled additional public hearings:
• Thursday, Oct. 13, 10 a.m. at the Tinian courthouse; and
• Friday, Oct. 14, 10 a.m. in the Senate chamber.
