Monday, March 17, 2003
Bill to repeal gross receipts tax hike
By Marissa A. Eusebio
Variety News Staff
HAGÅTÑA — Since the increase of the gross receipts
tax, senators have been working together to repeal the measure, saying
it would inevitably subject residents to more financial hardships. In
addition, senators have expressed concern that the tax would make Guam
“very unattractive” in comparison to its neighbors.
Efforts put forth by senators include the scrapping of the GRT, a petition
drive and Bill 44. Sens. Jesse Lujan, R-Tamuning, and Ray Tenorio, R-Yigo,
support the repeal of the law increasing the GRT.
In addition they are sponsors of legislation creating a voter introduction
program that aims to increase the participation of the people of Guam
in the process of making laws. It would also give the governor the ability
to borrow up to $125 million through a bond issue as part of an economic
Bill 44 would repeal the 50 percent increase of Guam’s gross receipts
tax, which went from 4 to 6 percent as enacted in Public Law 27-5.
Sen. Bob Klitzkie, R-Yigo, who submitted the bill, has gained the support
of all six Republican senators. He is hopeful that the community and business
leaders will also support his legislation.
He said the tax increase will lead to more jobs losses, more individual
hardship, more businesses closing, less economic growth and fewer opportunities
for businesses to come to Guam.
“This is the wrong tax at the wrong time that will have exactly
the wrong result for our people,” said Klitzkie.
He provided several reasons for opposing the GRT increase. First, he
believes that the tax is too heavy a burden on low-income taxpayers since
it will increase the prices of goods and services. Second, the tax is
regressive and is too heavy a burden on small businesses that cannot afford
to pay it which would result in more job losses in the private sector.
Third, businesses under fixed-price contracts signed before March 1, 2003,
could be forced to reduce services by eliminating jobs. Fourth, there
is no evidence that raising the GRT from 4 percent to 6 percent will increase
revenues to the government. And finally, raising taxes should come after
first reducing government expenses and the workforce, as well as initiating
reforms, reorganization and privatization.
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