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FSM Congress News, October 21, 2004

PALIKIR, Pohnpei (FSM Congress): October 21, 2004 - The Committees on Ways and Means and Resources and Development met this morning to discuss eight bills pending before Congress for consideration. Seven of the eight were congressional initiatives, with one being proposed by the President. The two committees believe that there was a pressing need for revenue generation as a result of changes in the amended Compact such as the yearly reduction in great amounts and elimination of certain programs under capacity building. For these reasons, the two committees found it necessary to act in a timely fashion to begin consideration of various options to generate revenue.

Some Members said they would have preferred these bills had originated from the executive, but regardless of the matter, Congress will need to work closely with them and make sure their detailed comment on the measures are collected for an effective tax policy.

Mr. Tony Otto from the President's office stated that the President would appeal to Congress to hold off on any tax-related action until the newly appointed Tax Reform Task Force could complete its work and issue recommendations.

Members of the committees agreed that it would be helpful if the President could make that request in writing so that his view of the measures are clear for them to address them during the current session.

When asked later how long the task force process might take, Members were concerned about waiting for a month. The committees and staff expressed concerns that delaying work on the measures might result in lost of opportunities in areas such as the corporate tax measures targeting specific corporations, since other countries were considering similar proposals.

They argued that it will take time for implementation of these measures and the country needs revenue as soon as possible, and so delaying the work of the measures is not the best approach from Congress point of view.

These two committees have held meetings on these measures in the States of Yap, Kosrae and Chuuk since last month and this is the first time in Pohnpei. The committees requested that the Departments of Finance, Justice and other relevant departments and agencies confer to present the views of the Executive Branch no later than Friday, October 22.