PALAU GOVERNOR: TAXES NOT ANSWER TO BUDGET SHORTFALL

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By Nazario Rodriguez Jr.

SAIPAN, CNMI (Mariana Variety, Aug. 28) - The Governor of Peleliu said he does not support proposed new taxes and [tax rate] increases because the burden will always fall on poor Palauan citizens.

Instead, Governor Jackson Ngiraingas called on the people not to support such proposals, which he said are intended to make-up for the US$10 million shortfall for the current fiscal year and for next year.

"It will further push the majority of the people to struggle to make both ends meet and the ripple effect of such increases will always go down to the states," Ngiraingas said.

Earlier, the President justified the new tax proposals saying that it is necessary to improve the economic well being of Palau.

Ngirangaingas recalled that in the last 16 years beginning in the administration of former President Kuniwo Nakamura and President Remengesau, the United States gave around US$450 million but most of the fund, he said, was not used in developing the economy of Palau.

He said that the money was gone without developing a viable economy for the people and "for these very reasons, are now the result of what is happening in Palau."

He said that it was an embarrassment for the government to create a line of credit and "now the government is asking for new taxes to make up for its budget shortfall and maybe to be used to increase the salary of the president and the vice president."

Senate President Surangel Whipps Sr. has earlier made justifications that the salary of the President should be raised because there other officials like the Justices in the Supreme Court and heads of Boards and Commissions and doctors receiving bigger income. Ngiraingas said that he believes so but this is not the time to do it but at other time.

"It’s a wrong time to do it now," said. Ngiraingas also supported Whipps’s earlier comment that some of the proposed new taxes and proposed increases are not beneficial to the people.

He said that taxes for fishing companies must be increased because they rake in millions of income from Palau waters but taxes from sewer and water should not be increased because these areas are basic needs that must be afforded to everyone.

However, Ngiraingas said that these new taxes would scare away investors and that the country cannot afford to be in this kind of dangerous situation.

The President, he said, must be more open or flexible now with regards to what has been offered to him by the Malaysian government about the Nautilus City Project and the commitment he made in establishing a diplomatic relations.

Earlier, the government of Malaysia has signified its intention to facilitate loans from US$30 million to US$100 million to Palau if such diplomatic relations between the two countries is established.

"That’s the only possible way that the government would be able to support its revenue shortfall so that we will not need to increase taxes that would burden the people of Palau," Ngiraingas said.

 

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