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By Haidee V. Eugenio

SAIPAN, Northern Mariana Islands (November 30, 1998 - Marianas Variety)---Governor Pedro P. Tenorio is not keen on supporting a proposed one percent personal income tax cut, reiterating an earlier position not to change the existing tax laws.

"We will stick to the existing taxes," the Governor said in an interview.

Tenorio said the proposed one percent across-the-board cut in personal income taxes, which is being considered to increase the people's purchasing power and stir local business activity, may not be a good option to help re-fill government coffers.

"We still have to review that proposal, but as I said earlier, we will not change the taxes until the economy gets better," the chief executive said.

Tenorio added that the Department of Finance and his special finance adviser are still working closely with the Legislature to identify and repeal some laws that might further deplete resources.

"I made it very clear that the Secretary of Finance and Mike Sablan are working closely with the Legislature to find ways where we could save for this government," he said.

The House Fiscal Law Review Subcommittee, which is under the Ways and Means Committee, disclosed earlier the possibility of granting a one percent cut in personal income taxes.

The subcommittee said that the tax cut would have a multiplier effect on the local economy, particularly by raising the business gross receipts tax (BGRT).

Created early this month, the subcommittee is expected to come up with a package of proposed legislation before the year ends to help the administration deal with the worsening economic difficulties.

Earlier, the Governor said he favors the temporary suspension of the 30 percent retirement bonus and the five percent annual increase in employees' salaries.

In another development, a key advisor of the Governor clarified that the government's deficit did not rise to $53 million as earlier reported.

He said the figure was the cumulative deficit in FY 1997, which is $21 million higher than the previous year's deficit.

The $53 million cumulative deficit is contained in the independent financial audit by Deloitte & Touche. The report will be released sometime this week after a review by the Office of the Public Auditor.

For additional reports from the Marianas Variety, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/Marianas Variety.

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