GUAM SHIPYARD GETS 25 PERCENT TAX BREAK

HAGATNA, Guam, (Pacific Daily News, Jan. 7) – For every dollar of certain taxes that the Guam Shipyard pays to the local government, 25 cents will return to the company in the form of a tax rebate approved by Gov. Carl Gutierrez before he left public office last weekend.

The shipyard's tax rebate arrangement was approved under the local government's Qualifying Certificate program, which grants generous tax rebates to certain businesses in exchange for such things as jobs creation and revenue sharing.

Ed Untalan, administrator of the Guam Economic Development and Commerce Authority, said GEDCA's board recommended approval of the Guam Shipyard's qualifying certificate after meetings that started Tuesday and wrapped up Friday last week.

Gutierrez approved the shipyard's qualifying certificate, Untalan said.

The GEDCA board can approve up to 75 percent in tax rebates under the qualifying certificate program and, in the Guam Shipyard's case, recommended a 50-percent tax rebate.

Out of the 50-percent tax rebate, the shipyard will essentially receive only a 25 percent tax rebate because the other 25 percent must go directly to the Guam Community College for an apprenticeship program for would-be shipyard workers, Untalan said.

The board reviewed the shipyard's qualifying certificate application and looked at the economic benefits and thought that it is the best way to support the island's only shipyard without having to provide it unfair competitive advantage over other island businesses, Untalan said.

The shipyard's tax rebate benefit applies to taxes paid on income from shipyard repair only and does not apply to services that other Guam businesses also may offer, such as non-ship related machinery repair, the GEDCA administrator added.

Untalan said the Guam Shipyard's qualifying certificate includes requirements that the business must:

- Write off a $1.3 million commitment made by the economic development agency to reimburse the shipyard for its investment on a medium-size drydock.

- Give to the local government 2 percent of shipyard gross revenue in excess of $16.5 million. Last tax year, the shipyard's gross revenue was about $18 million, Untalan said.

- Increase the number of full-time employees at the Guam Shipyard from 150 to 250.

The shipyard qualifying certificate was approved as the economic development agency begins to work with a new governor and lieutenant governor and tries to bounce back from the damage to its office and real property in Supertyphoon Pongsona's wake.

Under his leadership, Untalan said the agency has accomplished its mission and worked to its fullest with the resources it has.

January 7, 2003

Pacific Daily News: www.guampdn.com 

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