The Department of Revenue and Taxation is opposing Bill 1-36, which proposes to temporarily waive the payment of business license fees from October 1, 2020, through September 30, 2022, and to retroactively allow credit for fees that have already been paid.
DRT director Dafne Shimizu testified against the bill saying GovGuam got $2.5 million from general business license fees in 2020, 10 percent of which was budgeted for the Department of Revenue and Taxation.
“If enacted, without providing for an alternative source of funding for Revenue and Tax, this has the potential of reducing our department’s allotted budgetary resources directly by 10% or about $250,000. And as you know, when we came into fiscal year 2020, we already had to come in with a budget that was a little bit lower than the prior-year by about $465,000,” Shimizu said.
DRT’s largest expense goes to salaries and wages, which comprise $8 million to $9 million of the department’s $12 million budget.
“To be very honest, our team for many years has worked on a very bare-bones budget. We have a very, very basic budget, which consists of contractor payments, rent payments for utilities, and then payments of salaries and wages. Most likely, any reduction in our budget will adversely affect DRT’s ability to timely process tax refunds,” Shimizu said.
She added that DRT actually had to request for overtime so that the department can finish all its work.
“So really, the areas that the budget cuts will affect are going to be in the areas where there’s manpower involved. We may not be able to do some of the overtime, or we may not be able to hire as we need,” Shimizu said.