Unified Revenue Authority established
Palikir, Pohnpei (FSM Information Services): June 7, 2011 - On April 19, 2011, Congressional Bill No. 16-154 was signed into law and became Public Law No. 16-75, which amends Title 54 of the FSM Code and establishes a Unified Revenue Authority (URA) that is responsible for the administration of tax laws for the National and State Governments. This law is a fore-runner of a legislation package being considered in Congress as well as the State Legislatures to implement the nation-wide tax reforms. A one-year transitional period is built into the URA Act to allow for a smooth transition to the new tax administration arrangement.
During this one year transition period, other legislations need to be enacted to delegate the tax administration and collection functions of the Governments to the URA. The transfer of tax administration functions to the URA does not deprive the State Legislatures of their taxing powers. Setting of tax policy remains a State Legislature and FSM Congress function and power. Also, such delegation of tax administration function does not prevent the State Governments from reversing the delegation of tax administration functions from the URA.
Existing weaknesses, duplications and inefficiencies inherent in the current tax administration provide the key impetus for the move to centralize, modernize and strengthen tax administration by setting up a single autonomous tax administration agency. Tax-payers are expected to reap benefits from having to report to one tax office instead of two tax offices.
The URA Act provides that the Authority will be governed by a five-member Board of Directors consisting of representatives from all four States, the National Government, and the private sector. The Board of Directors will appoint a Chief Executive Officer (CEO) who will be responsible for the administration and enforcement of the revenue laws and the day-to-day operations of the URA.
Section 757 of the URA Act sets reporting standards for the URA. Within three months after the end of each fiscal year, an annual report must be submitted to the Board, the President, each State Governors, and the Finance Officials, detailing the following, at a minimum: a statement of financial performance, a statement of cash flows, a statement of distribution of revenues to the States, a copy of the URA's most recent budget, a report of the Authority's operations for the year, and such other information as is required relating to the Authority's financial affairs. The Annual Report and the auditor's opinion on the URA's accounts must be submitted to Congress and the State Legislatures within 30 days of receipt of such opinion. In addition, the URA is required to submit to its Board from time to time, but not less than once each quarter, an interim report accounting for estimated and actual tax collections as well as its estimated and actual expenditures.
The confidentiality provision in the URA Act (Section 735) prevents any URA employees, Board members, former employees and board members, or any person presently or formerly engaged by the URA from disclosing any business or personal information or document he or she received during the performance of duties for the URA.
The tax reform measures, including the URA Act, do not make or propose any changes to the existing distribution of taxes for the nation. Collected revenues are remitted to respective Treasuries in the government where the taxes were collected, using separate accounts for each of the five governments. The current arrangement for tax distribution among the governments remains.
The four State Governors and their technical staff including State Attorney Generals and Finance Directors are involved in the development of the tax reform measures. As members of the Tax Reform Executive Steering Committee (ESC), the State Governors support the ongoing tax reform.
For more information, contact the Tax Reform Project Manager in the FSM Department of Finance and Administration at telephone number (691)320-2640 or email email@example.com.
For further information on this release, please contact:
FSM Office of the President Public Information: Press, Radio, Video P.O Box 34 Palikir Station, Pohnpei, FM 96941 Tel.: (691) 320-2548/2092 Fax.: (691) 320-4356 e-mail: firstname.lastname@example.org http://www.fsmpio.fm/