(Capitol Hill, Saipan – Sept. 22, 2022) The Governor's Council of Economic Advisers (GCEA) issued a statement today in response to recent claims that the GCEA’s 2021 Annual Report includes information from the Fiscal Response Summit of 2020 that recommended the taxation of sugar-sweetened beverages and tobacco.
The GCEA respectfully wishes to clarify that the Council did not recommend the taxation of sugar-sweetened beverages and tobacco. Furthermore, GCEA was created by an Executive Order after the 2020 Fiscal Response Summit. While members of the Council were participants of the Summit, any comments made at the time do not reflect the work and recommendations of the Council.
However, the Council, since its formal establishment, has made recommendations in the 2021 annual report and in Council meeting to provide equity in the taxation of guest houses and bed and breakfasts, many of whom do not comply with the current CNMI rules and regulations to operate in the tourism sector. Tourism continues to be the most critical industry in the Marianas, and there must be requirements and standards to which all operators must adhere to when providing services to our visitors. The lack of equity in the statutes and regulations for tour operators, guest houses, and bed and breakfasts pose a significant challenge to ensuring the quality of the Marianas as a destination and the safety of its tourists.
All tourism industry operators should follow the same laws and standards for the Marianas’ tourism market, including paying taxes and fees. In addition, it will ensure that their operations meet applicable safety and other code requirements, while addressing their employees' and our tourists' safety concerns. As a result, this will generate $2 million to $6 million in lost revenue for the Marianas compared to collections currently made under the present statute providing the Hotel Occupancy Tax.
The GCEA’s 2021 Annual Report is available for download or viewing on GCEA’s website at www.cnmieconomy.com/reports.