Various stakeholders from the island’s business sector filled the public hearing room of the Guam Congress Building to testify on a proposed bill that aims to reduce the current Business Privilege Tax from 5 to 4 percent.
Introduced by Senator James Moylan, the intent of Bill 9-35 is to reduce financial difficulties on the residents of the island as a result of last year’s legislative decision to raise the BPT to alleviate complications posed by the 2017 Trump Tax Cuts.
According to Joe Arnett, the chairman of the Guam Chamber of Commerce, the passage of the bill could give GovGuam the chance to evaluate its financial structure.
“We believe that Bill 9-35 provides a benchmark for the Government of Guam to embrace as it essentially creates a 9-month timeline for right-sizing to take place. This is an opportunity for our governor to assess finances, improve collections, and take advantage of Public Law 34-87, which provides the governor authority to reorganize the government with the intent to save $30 million without legislative authority,” Arnett said.
In addition, Jon Ulloa of NAIFA-Marianas expressed concerns about consumers not feeling inclined to invest in the local island economy.
“The market is survival of the fittest. So businesses will either go under or they’ll barely survive and consumers will go to internet purchases more rather than buy local. And when you’re living check to check, you have to find a way to afford what you normally need,” Ulloa said.
Support for Bill 9-35 resounded throughout the public hearing room, with attendees urging to diversify and enrich the island’s economy, rather than penalize residents with invisible regressive taxes.
While Senator Moylan says that the reduction of the BPT could create certain fiscal challenges, he says he is committed to addressing those concerns.