Imperial Pacific International (IPI) is facing a renewed push by government officials to be charged an annual tax on gaming revenues after it was revealed the Saipan casino operator has paid only US$21,000 in business gross revenue tax (BGRT) since the start of the year.
The BGRT figure, representing a massive decline from the US$40.9 million IPI paid in 2016, US$67.7 million in 2017 and US$43.6 million in 2018, was highlighted in a report issued by the Department of Finance last week which predicts a US$19 million budget shortfall for the CNMI government in FY19.
With the government having already implemented austerity measures as the region struggles to recover from the devastation of Typhoon Yutu 12 months ago, House Minority Leader Edwin Propst has called for “an honest, open and transparent discussion as to why we [allow] the casino not to pay their fair share of taxes while the rest of us rob Peter to pay Paul to make payments,” according to Marianas Variety.
Under current regulations, IPI’s annual commitments comprise the 5% BGRT, a US$15 million license fee and a US$20 million contribution to a Community Chest Fund.
Propst, one of IPI’s most vocal critics, first proposed the introduction of a 10% tax on net gaming revenues in 2017 but was encouraged to shelve the idea while IPI began development work on its Saipan integrated resort. He raised the issue again in June this year after reports emerged of IPI’s plummeting BGRT contributions.
In response, IPI Chairman Mark Brown claimed the company had in fact paid more taxes than it should have in previous years and suggested it be able to apply tax credits in lieu of paying more taxes in 2019.