By Emmanuel T. Erediano
SENATE President Edith Deleon Guerrero on Monday prefiled Senate Resolution 23-15, which aims to attract internet-based businesses to the CNMI by providing them with tax incentives.
Although the Covid-19 pandemic has ended, the CNMI’s economy continues to decline and may not recover until tourism fully resumes or new industries are established in the Commonwealth, the resolution said.
Although local businesses are working diligently to increase tourist numbers and jump-start the economy, “more must be done to diversify the CNMI’s economic activities to generate additional revenues,” the resolution added.
It noted that one of the biggest economic changes in the past four years is the transition to e-commerce with more internet-based businesses and remote workforce.
E-commerce, or electronic commerce, is the activity of electronically buying or selling products on online services or over the Internet.
During the pandemic, e-commerce purchases “skyrocketed and became a regular investment for the everyday consumer,” the resolution said. Now that more people have discovered the convenience of online shopping, “much of the new e-commerce market is here to stay in the post-pandemic world,” the resolution added.
In 2022, for example, e-commerce accounted for 19% of all retail sales globally. This “is expected to grow to nearly 25% by 2027,” the resolution stated.
The CNMI can gain significant economic benefits from attracting new industries such as online retailers, financial and securities companies, information technology and other internet-based businesses, the resolution added.
These companies can establish their headquarters or subsidiaries in the CNMI, earn their income from sources inside and outside of CNMI, yet spend that income and pay taxes on that income in the CNMI, the resolution stated.
Attracting internet-based businesses to the Commonwealth “could put the CNMI on the world map and on the same level with many countries expanding their e-commerce industries and remote workforce. With the necessary proposed tax amendments, the CNMI could become more competitive and marketable for e-commerce industries in the U.S. mainland and throughout the world,” the resolution stated.
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