Legality Of Palau’s Remittance Tax Should Be Decided in Court: Delegate

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Legality Of Palau’s Remittance Tax Should Be Decided in Court: Delegate Supporter of law respects former President for proposing legal challenge

KOROR, Palau (Island Times, Feb. 25, 2014) – When Palau Delegate Jonathan Isechal was asked for comment on the move by former President Johnson Toribiong to spearhead a signature drive against the remittance tax he said "Let the courts decide."

The former President, who is a lawyer, also signified his intention to represent those who will challenge the remittance law in court.

Isechal is one of the proponents and one of those who voted for the remittance law when it was acted upon by the House of Delegates (HOD).

Isechal, while not saying whether he supports or is against the move, said that he respects the former President on his decision to initiate a signature drive and plan to bring the matter to court.

"Our system of government allows for that. Let the courts decide whether the remittance law or tax is unconstitutional or not," he stressed.

The petition spearheaded by the former President has already garnered several hundred signatures.

Implemented on November 1, 2013, the remittance tax is deeply unpopular with many sectors, including banks, Palau Chamber of Commerce, and the different foreign communities in this island nation.

Those opposing the remittance law said that it is excessive, a flawed law, and discriminates against the foreign community in Palau. Palau is home to several thousand foreign nationals, including Americans, Japanese, Filipinos, Bangladesh, Taiwanese, Koreans, Europeans, Chinese and Pacific islanders.

"It is Palau versus the foreign community," a foreign lawyer practicing in Palau was overheard as saying.

The remittance law provides that a tax of 4% to be taken out of all remittance. The collection is intended to finance the Civil Service Pension Fund. As of December 2013, $83,000 has been collected through the remittance tax.

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