Palau Chamber Of Commerce Won’t Sue Over Remittance Tax

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Former President plans lawsuit to challenge constitutionality of law

KOROR, Palau (Island Times, March 13, 2014) – The Palau Chamber of Commerce (PCOC), one of the strongest critics of the remittance law, will not join a planned lawsuit that will challenge the law in court.

Kaleb Udui, Jr., the PCOC president, said that they are hands-off with the plan to challenge the constitutionality of the remittance law or tax.

There is a plan by those who opposed the law to file a lawsuit in court. The effort is being led by former President Johnson Toribiong. The plan is being backed by the foreign community who are directly affected by the remittance tax.

Udui said that the Chamber has sued the government before and won. "We have been against the remittance law all the time. But we think the issue is not strong enough for us to join at this time," he stressed.

The Chamber President said that they strongly backed efforts to repeal the law earlier. Senator Hokkons Baules has introduced late last year a legislation that will repeal the remittance law. But the measure was tabled at the Senate.

"We advised the government against it. But it would not listen to us. So that’s it," Udui said.

In the same interview, Udui reiterated the Chamber’s opposition to the remittance law.

"It is bad for the economy. Besides, the government only collected a little amount since the law was implemented," he said.

The remittance law took effect on November 1, 2013. As of December 2013, the government has collected $83,000 remittance tax.

Prior to the remittance law implementation, it was reported that the PCOC, along with banks and remittance companies, were in discussion regarding a plan to file a suit that will enjoin the government from implementing remittance tax.

The remittance law provides that a tax of 4% to be taken out of all remittance. The collection is intended to fund the Civil Service Pension Fund.

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