Guam – The Administrator of the Guam Economic Development Authority, Karl Pangelinan, says he would welcome an audit of his department’s Qualifying Certificate [QC] program .
In response to Vice Speaker Cruz’s call for an oversight hearing on the QC program, Pangelinan told PNC News in an email “We’d welcome an audit by the OPA and we’d also be ready for any legislative oversight review.” And he suggests that Rev and Tax and the Department of Administration be included in any inquiry so that lawmakers “get the complete picture.”
Pangelinan explained that GEDA “handles the front end of the QC process – issuance and compliance.” He says a QC recipient gets no tax benefits “until a thorough compliance check is completed.” And only after that compliance check does GEDA issue the certificate of compliance which the company must then take to Rev and Tax for processing.
Senator Cruz highlighted the $15.5 million dollars which was approved in “rebates and abatements” to QC holders last year.
The Vice-Speaker said that amount was “greater than the combined total of the preceding four years under the same program.”
But Pangelinan counters that “GRT abatements and Corporate Income Tax rebates are tied to company’s annual financial performance” and “the amount can certainly fluctuate annually depending on how successful (or unsuccessful) a company is for that given tax year.” But “as far as the number increasing dramatically, I’ll gladly take a look at the numbers over the years before commenting” in any further detail.
Pangelinan emphasized that “no new QC’s have been added to the existing list,” and the only new QC which the Administration has approved “is still tied up in a legal review.” And he says he supports the continued use of QC’s saying “To grow an economy effectively we need to grow the jobs base and the QC is really the only tool that we currently have to attract investments that create jobs. Our most stable industry that we have today (tourism) was built on the QC program. We’re looking to further enhance that industry and create new ones through the program.”