Micronesia

talks tax

The Congress of Micronesia in a February public hearing was treated to vigorous debate on a new tax scheme which would bring in more than four times the present revenue gained from taxes.

The scheme, drawn up by Dr Richard Tobi, an expert on taxes in developing countries, who works with the United Nations Development Programme, would yield SUS 23 million annually as against the figure of SUSS.S million generated by the present flat rate of 3%tax on wages and salaries.

Medium and high income earners would be most affected by the scheme.

Company tax would be 35%.

Witnesses from all district adminis trations, district legislatures and business communities were invited to express their views.

Headquarters witnesses spoke in favour of the tax bill, while businessmen and political leaders spoke strongly against its passage at this time.

Chairman of the COM House Committee on Ways and Means, Edgard Edwards of Ponape, said after the hearing that apart from the Tobi scheme in its present form the Congress had other alternatives. It could introduce a scheme which would raise about SUSIS million or another which would raise $lO million. The latter option, he said, “would accommodate the wishes of every District”.

Mr Edwards said that the tax bill is being treated “very cautiously” in the Congress to reflect the wishes and desires of the people of Micronesia.

“There is no way we would persecute them by taxing them higher,” he said.