Chuuk State Considers Taxing Citizens Living Abroad

admin's picture

Emigrants could face loss of voting rights, asset forfeiture

POHNPEI, Federated States of Micronesia (Kaselehlie Press, Oct. 5, 2015) – A bill submitted by request from the Chuuk State Executive Branch to the Chuuk House of Representatives seeks to charge Chuuk’s emigrants an annual Change of Residence Tax in the amount of $100 each.

Under the bill, failure to pay the tax could result in seizure of assets held within Chuuk state, loss of voting rights and other potential penalties.

The proposed bill says that the "outmigration of Chuuk State residents has caused serious social, economic and political problems for the State. There is a serious shortage of skill(ed) manpower. A high percentage of properties are left abandoned or underutilized(,) diminishing their contribution to the State’s economy and tax base. The migrant residents are paying taxes to their current countries of residencies despite continuing to enjoy the privileges and protection of Chuuk State residency in that their properties in Chuuk continue to enjoy the privilege of Chuuk State laws; their family responsibilities for the education and health of their loved ones are taken care of by the State; they are enjoying the recognition and benefit of being Chuuk State residents without contribution to the civic affairs of the State. Therefore, based on all of those reasons, a Chuuk State Change of Residency tax of $100 per "resident" per year is now assessed and levied on every Chuuk State resident currently residing outside of the State.

The bill attempts to define who would be subject to the tax but the language of the definition seems to be pointed most directly at those citizens of Chuuk who have chosen to live in the United States and who also continue to hold a passport and vote in Chuuk elections. The bill’s language, if it were passed in its current form could also be applied to citizens of Chuuk who are currently living in any other FSM State, or even to college students who have been awarded scholarships to study abroad.

"For the purpose of this Act, a Chuuk State ‘resident’ is subject to the tax hereunder if:

a) He or she has reached the age of 18 or older; and

b) He or she was born in Chuuk State, or has one or other parents who are permanent residents of Chuuk State by continuing to do items #d or #e below; and

c) He or she lives outside of Chuuk for at least 150 consecutive days a calendar year; and either

d) He or she has maintained his or her FSM citizenship in terms of passport ownership and voting participation in the last Chuuk State election or a Chuuk State municipal election; or

e) He or she continues to maintain substantial residency relationship with Chuuk State such as home ownership in Chuuk State, and or immediate family members such as sons or daughters or spouse continue residing in Chuuk State and attending public schools, holding Chuuk State government or other employment, using Chuuk State goods for business abroad, or enjoying their residency benefits and privileges."

The bill says that in June of each year each of Chuuk’s 40 municipalities would be required to submit an official list of people from that Municipality who resided outside of Chuuk State during the previous six months. The Chuuk State Election Commission would also be required after each election to submit a complete list of names of all Chuuk State residents living outside the State who requested to vote in that election. Copies of the lists would be provided to the Governor and the Chuuk State Legislature.

The Chuuk Tax and Revenue Office would be required to verify whether the people on the lists are "residents" according to the above definition for purposes of the proposed tax. Chuuk Tax and Revenue would then be required to send out a tax bill to each verified individual through the best means possible, either through mail, personal delivery or Internet messaging. A taxpayer would have until September 1 of the fiscal tax year to remit their payment.

If a person does not pay the tax by September 1 they will be considered delinquent. No interest or penalties will accrue and the taxpayer could "redeem" their delinquent status in subsequent tax years. However, any taxpayer who has accumulated a total tax delinquency of $300 "will lose his or her right residency privilege of having his vital state records available to him or her, specifically including state hospital records and live birth or death certificates, state driver’s license and so on as may be provided by law," the bill says.

"Any taxpayer with a $500 or more tax delinquency will lose his or her residency privilege of voting in any state election and will entitle the State to seize any of his or her personal property with equivalent value to sell and realize the delinquent tax," it says.

The bill does not provide the definition of the word "family" as it applies in the bill when it says, "Any tax payer family with a total delinquent tax of $5,000 or more, will entitle the State to seize a family real or personal property of approximate value and foreclose on the property through established legal procedures."

Rate this article: 
No votes yet

Add new comment