legislation

THE House of Representatives on Friday unanimously passed House Bill 23-103, which would exempt export services and the sale or exchange of securities and similar assets from the business gross revenue tax or BGRT.

Authored by Rep. Manny Gregory T. Castro, the bill also proposes to allow rebates for exempted activities. It seeks to amend the local tax code to remove “impediments to the attraction and retention” of businesses participating in the global digital economy and financial markets. This could “foster a rapid growth of these industries in the Commonwealth, which could result in a significant increase in tax revenues.”

By Emmanuel T. Erediano

TWO tax experts and an information technology business owner expressed support for House Bill 23-103, which would exempt export and security sales from business gross revenue tax.

Introduced by Rep. Manny Gregory T. Castro during a session on Thursday, H.B. 23-103 states that “corporate tax shall not apply to the gross revenue derived from the revenue generated by the export of goods, services, resources, food, fish or agricultural products produced or manufactured in the Commonwealth and exported by the manufacturer or producer regardless of whether or not the manufacturer or producer is deemed the ‘seller’ of such goods, services, resources, fish or agricultural products.”

According to the bill, “The current CNMI tax code presents impediments to the attraction and retention of individuals and businesses participating in the global digital economy and global financial markets. However, minor changes to business gross revenue tax (BGRT) exemptions can remove these impediments and foster rapid growth of these industries in the Commonwealth, which could result in a significant increase in tax revenues.”

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By Emmanuel T. Erediano

SENATE Floor Leader Corina Magofna on Thursday pre-filed Senate Bill 23-60, which would amend the Office of Foreign Investment Assistance Act of 2005.

The law created the Office of Foreign Investment under the Department of Commerce. Its primary responsibility is to assist a foreign investor with a long-term business certificate in obtaining all the permitting and licensing requirements of various government departments and agencies in an expeditious manner.

Magofna’s bill states that with the Covid-19 pandemic “changing the world order and economies, it is necessary to revamp the purpose and mandate of the Foreign Investment Assistance [Act.]”

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.

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