Guam has lost over $22M dollars of taxes on federal military contracts due to inadequate enforcement by the Department of Revenue and Taxation(DRT).
After an extensive audit, the Office of Public Accountability(OPA) released a performance report on the Collection of Business Privilege Taxes(BPT) of military construction contracts which disclosed that there’s over $22M dollars that are owed in taxes to GovGuam.
Vice-speaker Tina Muña Barnes requested OPA to conduct the audit back in May 2021.
Following research done by the Guam Military Buildup and Public Accountability committee, which seeked to determine whether recipients of Department of Defense(DoD) contracts were filing and paying their taxes on Guam as required by law.
Vice-Speaker Muña Barnes who is also Chairwoman of the Committee said in a release, “Based on our initial findings, and subsequently corroborated by the OPA Report, it is clear that there’s at least $22M that the Government of Guam has lost out on. While we are unable to determine the maximum extent of the leakage, we know we neglected $22M that could’ve gone to schools, GMH, Public Health, Public Safety – the list of problems that millions of dollars could fix goes on.” adding “It is also clear that three audits and 20 some years later, we have systematic issues; when one government agency is not talking to another government board or agency and ultimately costing us much needed public funds, we need to do better.”
According to a 2014 audit made by the Department of Interior’s Office of the Inspector General(DOI-OIG), DRT lacks the infrastructure, mechanism, and manpower to collect the taxes that are due to Guam.
So far, the necessary improvements to address the findings and recommendations in the 2008 and 2014 DOI-OIG audits haven’t been made.
The OPA audit disclosed several deficiencies that resulted in question costs, unrealized revenues and other financial impacts for a total of over $22 million dollars.
OPA made recommendations to DRT in order to resolve the deficiencies.
The Vice-Speaker said she has begun conversations with Delegate James Moylan and Joint Region Marianas to determine how to move forward.
“At the same time, as these are federal dollars owed to Guam, I will be writing to the appropriate federal and local enforcement authorities to ensure that Guam receives the taxes rightfully owed.” added Muña Barnes.