Cash-strapped Guam? There’s a way of out it. Collect taxes – properly and efficiently.
Democrat Senator Mike San Nicolas is exasperated that taxpayers, mostly senior citizens are receiving notices of unpaid real property taxes, and the only way to clear them of it is to show their tax receipts, some dating back to as far as 30 years. San Nicolas lamented that it is not fair that the administration is running after the individual taxpayers, instead of going after business taxes.
Long lines at the Real Property Tax Division of the Rev & Tax is a daily scene, mostly relating having inaccurately received a notice of unpaid real property tax.
San Nicolas said one of his first acts in office was to study the collections procedure at the Rev & Tax, wherein it was found out that as of March 13, 2013, a whooping $179 million remain uncollected. Gross Receipt Tax accounts for over $100 million, 21.5 million in corporate taxes (1120), $33.9 in personal income tax. It is also surprising that some employers were not remitting withholding taxes ($21.5 million).
Abated interest and penalties
Aside from uncollected taxes, what is more disconcerting is San Nicolas’s discovery of tens of millions of penalties and interest on delinquent taxes that were abated from 1993 to 2013. Sadly, San Nicolas’s office has been denied of the details of the abatements, as Rev & Tax Director John Camacho states this is tantamount to unauthorized disclosure of taxpayer information. San Nicolas wants to know the integrity of the abatement process, who, and what qualifies some businesses and individuals of the abatement. Interest and penalties are meant to deter people from not paying on time, but what are they being waived to some and not on others? Those questions remain unanswered, and the lack of transparency breeds corruption. The documents relating to the abatements (form 4571) are available only to some Rev & Tax people and the Governor (who is by law, the Guam Tax Commissioner) or his designee.
The need for an independent investigator
It is at this juncture that San Nicolas, on October 20 wrote Governor Eddie Baza Calvo requesting him to authorize the Attorney General to act as a special investigator and prosecutor to look into the collections and enforcement at the Rev & Tax. Having a credible independent investigator would deter graft and corruption. At the moment, San Nicolas said, looking at the abatement figures (that has reached $35.4 million in total from 1993 to 2013) and also the tens of millions of supposed tax collection that is just gone uncollected and will never be collected because they were not litigated during the 10-year prescriptive period, just clearly indicates the need for independent investigation. The Attorney General would be the best choice for the job as he/she is an elected official and not an appointed cabinet member.
System Breeds Corruption
Sources say that what is going on is that because of the lack of transparency, a tax cheat, once caught can get favors from corrupt Rev & Tax officials to have the penalties and interests abated, sit on his case for the next 10 years, and viola, all the tax due is written off. It was also said that the system is fertile ground for graft and corruption. Big players who intend to cheat on their taxes can just “befriend” the Tax Commissioner (the governor) and people at the Rev & Tax (the director also being a governor appointee), and make sure their pet governor stays in power in full 2 terms and making sure that succeeding one will still be in the bag. This immense power of the governor, can also be used to make the big businesses do the wishes of the administration.
Now, who wants to go against the governor?/The Junction News Team
