Pair of bills seek to repeal Guam’s Gross Receipts Tax

Legislation proposed by senators Klitzkie, Lujan want GRT back to 4%

by Jason Salas, KUAM News
Wednesday, April 23, 2003

Members of the legislative Committee on Economic Development convened, along with more than 60 of Guam's notable businesspeople and private individuals for a special public hearing.

A pair of bills seeking to repeal increases in the island's gross receipts tax were drafted, and bills 44 and 54, introduced by Republican senators Jesse Anderson Lujan and Robert Klitzkie, respectively, were both short and to the point, calling for the drawback of Public Law 27-5. Of note was Senator Klitzkie's bill...being only a single sentence.

This brevity, according to the senator, underscores the need for an immediate and obvious solution. The initiatives were backed by 11 businessmen and citizens, who read prepared statements citing both specific and general instances throughout Guam's various industries wherein increases in GRT have already and will continue to cause damaging economic effects.

Guam Federation of Teachers Union Chair Matt Rector, the sole supporter in attendance of the tax hike, acknowledges that his is a minority opinion, but believes pragmatism is better for the island's economy in the long-run. He told KUAM News, “Currently Guam is the lowest taxed place in the nation. It's also the most business-friendly place in the nation. Even with the 2% increase in GRT, we're still the lowest taxed place in the nation.

"Times are tough...of course, governments need to reorganize, and of course, we're working on it really hard. But the business community needs to pickup and do their fair share. Let's face facts: a 2% increase means $0.02 on the dollar. $0.02 on the dollar? That's nothing. Everybody can afford $0.02 on the dollar. The businesspeople just don't want it to cut into their profit. And, it's time for them to pay their fair share.”

Additionally, Republican Senator Ray Tenorio commented on his past proposal to not just repeal the increase, but further to permanently lower the Gross Receipts Tax to 3%. “I think the reducing of the GRT is going to be much more advantageous not only to the island, but also to the consumers to the people, the businesses and the government. I think that if the businesses can afford to pay GRT at 3%, which is much more palatable right now (considering the economic condition in Asia and the world), it's going to be easier for the government to collect.”

Tenorio's proposal was previously turned down, with all democrats rejecting the pitch. The two proposed bills will soon be up for vote by your senators.

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