GEDA not privy to amount of taxes rebated through Q.C. program

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Guam – The legislature held an oversight hearing on the Guam Economic Development Authority’s (GEDA) Qualifying Certificate or Q.C. program to determine the overall successes and challenges of the program.

The Q.C. program grants tax rebates to companies that meet certain requirements. Companies with Q.C.’s pay their taxes upfront and then get rebates if they have met all of the criteria required to maintain their Q.C. One of the most important criteria is the creation of local jobs. Q.C.’s must be approved by the GEDA board, the attorney general and finally the governor. GEDA reported that over the last ten years the Q.C. program has provided 2,068 jobs, $1 billion in labor costs, $6.7 million in training costs, $18.4 million in charitable contributions, $4.1 million in mandated community contributions, $866.1 million in local purchases, $195.5 million in utilities, and $129.6 million in reinvestments into Guam. GEDA says the total economic activity this has generated for Guam amounts to $2.3 billion dollars without including employee benefits or any taxes paid to GovGuam.

Speaker B.J. Cruz asked if GEDA knew how much in taxes was foregone due to the Q.C. program. “That information is still with Rev and Tax. It’s not something that they are able to transmit to us because of the proprietary nature of it. So that is one thing that we are not able to quantify here. I mean we can make a guestimate based on their community contribution and that’s a percentage of their investment or rather their benefit. So, it’s difficult for us to tell you how much is rebated or abated at the end of the year. We can tell you the investment. We can tell you how much the jobs. “Is there a way that Rev and Tax can provide that number to you without being specific as to the Q.C. applicant or the company itself? I mean it just seems to me that yes there’s 2 billion worth of economic activity but how much is that costing us in foregone taxes and in what tax in what categories? How much are we losing in real property, how much in BPT, how much in this, or how much in that? I don’t want to know who it’s going to or who’s receiving it but at least have some kind of, you guys don’t keep that or you don’t even have that.” Senator it would be very nice if we got that information then we can keep the statistics going because that’s the only statistic that we don’t have,” said GEDA Compliance Officer Claire Cruz.

GEDA officials say that they have asked the Department of Rev&Tax for these statistics but have not been given the information.