San Agustin demands tax amnesty P&I losses

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Senator Joe S. San Agustin, appropriations chairman, said no budget is perfect and acknowledged that his Bill 186-35 COR is just a starting point for discussion.

“And the Speaker was asking, out of $193 million, we might have said, ‘don’t do the tax amnesty if you’re collecting $33 million, but we lost $50 million.’ ‘Cause, if there’s $73 million that’s still collectible, out of the $73 million—which includes interest and penalties—is it really only $20 million that’s out there?” -Sen. Joe San Agustin

Guam – At long last, Committee on Taxation Chairman Sen. Joe San Agustin (D) got his public hearing with the Dept. of Revenue and Taxation on Friday.

The oversight huddle came on the heels of delay. After two weeks of FY19 budget session pushed his hearing off calendar eight days ago, and while another workweek whizzed by as the Calvo Administration combed through and analyzed the annual government spending plan, San Agustin was in a hurry for substantive answers from Rev & Tax’s upper management.

Sen. San Agustin had hoped to hold his hearing before the marathon emergency budgeting session closed a week ago. But the delayed hearing date arrived in budgetary mid-dissection, as the Governor’s team was busy picking apart the already passed General Appropriations Act of Fiscal Year 2019. By Friday, the several shortcomings the Administration said it was discovering left lawmakers guessing whether the budget would survive Adelup’s analysis after narrowly squeezing out of the senate with an 8-7 vote.

Friday’s hearing agenda included tax collection, enforcement and compliance. Rev & Tax Director John Camacho had already told senators during budget session that $73 million in overdue tax receivables had been deemed collectible, net of $193 million in overall delinquent revenue actually due and payable.

By Friday, frustrated senators wanted to know how much in penalties and interest the treasury could lose as a result of the department’s aggressive tax amnesty principal and collections program.

“See, the people of Guam are watching this, Mr. Camacho, and a lot of them are mathematicians,” San Agustin said while the hearing was underway with live cameras telecasting the proceedings.

“They got their calculator there. They be looking at: ‘What is four percent? What I owe? What should I pay?’ and for some of the folks that haven’t filed—[they] are probably hoping there’ll be another tax amnesty. If not, they know it’s gonna catch up real fast.”

Director Camacho told the committee that the current interest rate for late payers is four percent, but that total lost penalties and interest are hard to figure, because different revenue receivable types require different rates of taxation, and that penalties and interest have accrued for years, over various delinquent accounts.

Nevertheless, San Agustin was adamant that the Legislature must have hard numbers, especially while the FY19 budget is under the Governor’s review. San Agustin reiterated what Appropriations Chairman and Speaker BJ Cruz had just been trying to ask Camacho for during the hearing.

“And the Speaker was asking, out of $193 million, we might have said, ‘don’t do the tax amnesty if you’re collecting $33 million, but we lost $50 million,’” San Agustin said.

‘Cause, if there’s $73 million that’s still collectible, out of the $73 million—which includes interest and penalties—is it really only $20 million that’s out there?”

“We do have the allocation of tax, interest, and penalties,” Camacho said. “I think I can get those to you—those numbers—but we do have, even for the $193 million, we do have what the tax is, what the interest is—I just don’t have the numbers [in front of me]. I didn’t know we were going to get into that.”