Government of the Federated States of Micronesia

Tax reform among EPIC's adopted resolutions

Palikir, POHNPEI (FSM Information Services): September 16, 2005 - The endorsement of a new tax reform plan is among the resolutions adopted by the National Leadership during their recent meeting in Palikir.

From September 5-8, the Economic Policy Implementation Council (EPIC) met in Palikir to review the status of the nation's economic strategy and concluded with nine resolutions, among which include the endorsement of the recommendations by the Tax Reform Task Force.

Resolution No. 2 [On tax reform in the FSM and the States] The members of EPIC endorsed the Final Recommendations from the Tax Reform Task Force as presented to EPIC from the President. The members of EPIC call upon the state and national governments to support this tax reform plan and to use all efforts to aid in its implementation.

The other resolutions include:

Resolution No. 1 [Regarding coordinated procurement and accounting procedures for the PMU] A steering group should be appointed to review this issue and provide a recommendation to the states. The steering group should be comprised of representatives from all four states and the National government as well as representatives from TC & I, the Department of Finance, OCM and the PMU.

The steering group should meet during the Infrastructure Sector Conference in Chuuk in September 2005 and decide at that time on the appropriate recommendations.

Resolution No. 3 [Regarding the Sustained Growth Strategy] The members of EPIC adopt the sustained growth strategy as set forth in the strategic development plan as a set of guiding principles, while acknowledging the national government will continue working on developing elements of the strategy. All state governments are encouraged to implement the sustained growth strategy by developing their budgets based on the principles set forth in the strategic development plan.

Resolution No. 4 [Regarding the development of a national trade policy for the FSM] The members of EPIC look forward to the upcoming activities of the national government to educate leaders and policy makers in the states about PACER and PICTA and request that such activities include a broader discussion about the elements of a national trade policy.

The members of EPIC call upon the national government to develop a coherent trade strategy for FSM, including consideration of PACER and PICTA and relations with the US.The members of EPIC call upon the national government to establish a national trade facilitation committee in order to develop a coherent trade policy, with membership from the national and state governments, the private sector, non-governmental organizations and other stakeholders.

Resolution No. 5 [Reimbursement from US Federal Grant and CFSM funds ] The members of EPIC request the department of finance and administration of the FSM Government to process request for reimbursements in a more timely manner. During this process, the Department of Finance should provide a schedule to the states for amounts submitted for reimbursement, amounts determined due to the states and a payment schedule.

Resolution No. 6 [Regarding the Pohnpei Airport Runway Extension Project ] The members of EPIC direct the department of economic affairs to work closely with Pohnpei State, the Pohnpei Visitors Bureau and the Pohnpei Port Authority to submit as soon as possible to JICA the tourism development plan and provide other support to JICA as appropriate.

The members of EPIC support the PPA in its efforts to rehabilitate the Pohnpei Airport facilities and infrastructure, including the proposed runway extension.

Resolution No. 7 [Regarding Fuel Supply & Storage ] The members of EPIC support the Interim Report of the fuel task force and endorse the work of the fuel task force to date.The fuel task force previously established by EPIC Resolution #2005-01-1 shall be established by the Presidential order. The members of EPIC direct the fuel task force, created by presidential order, to continue with its work and continue to review of alternative supply.

Resolution No. 8 [Regarding the ADB Omnibus Infrastructure Development Project] The members of EPIC endorse the request of the national government to the FSM Congress to ratify the loan agreement between the FSM and Asian Development Bank for the Omnibus Infrastructure Development Project.

And finally Resolutions No. 9 [Regarding the South Pacific Mini Games] expressed EPIC's Congratulations to all the athletes who participated in the South Pacific Mini Games for their strong performance.

The issue of Formula distribution of the amended Compact was agreed to be explored further and discussed at the next EPIC meeting to be scheduled soon.

The EPIC membership is comprise of the Leadership of the five Governments: the President and the Governors of the four States along with the Speaker of the FSM Congress and the Presiding Officers of the each Legislature.

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