Would the island benefit from delinking itself from the federal government’s Internal Revenue Code (IRC)?
This is the question that the new Tax Commission has to find answers for as agreed upon by the members during their first meeting, October 13.
As there are too many concerns and issues that need to be addressed, the commission decided to take things one step at a time, and as Senator Mike Nicolas sitting as chairperson for the commission states, tax reform is a long and slow process. As such, the commission has not set a timeline as they want to make sure they want to accomplish something, learning from the mistakes of the previous commissions.
The commission decided not to take on tax reform issues just yet as they decided that the first step would be to determine the feasibility of delinking from IRC. Once this is issue is settled, then they can proceed on tax reform.
And just as the commission is starting with their long and arduous task, there are already questions as to the impact of delinking. Vice Speaker BJ Cruz is concerned about its effect on Section 30. As chairperson for Committee on Appropriations and Adjudication, he wants to make sure that he will have source of funds, Section 30 being the territory’s one major source of funds. He is also concerned of its impact on the Guam’s triple tax exempt status.
As the commission members agreed to tackle delinking issue, Joe Bradley, SVP of Bank of Guam (representing Guam Bankers Association) said that a very small fraction of the IRC applies to Guam, adding “IRC is not designed for us.”
Senator Nerissa Underwood on the other hand, states that there would be a need for a third party research to which Roseann Jones of University of Guam agreed they can help with.
San Nicolas said that to start, committees will be formed and standing rules shall be drafted by his office. San Nicolas’ office earlier on, prepared Tax Commission Working Archive, a more than a hundred-page collation of Guam’s tax history, and the works of the previous tax commissions among others.
Present during the first meeting were Joe Arnett, Joseph Bradley, Roseann Jones, and Gary Hiles (as ex-officio member). The commission agreed to meet every first Tuesday of the month./The Junction News Team
