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FSM Tax Reform Executive Steering Committee Endorses Package of Enabling Legislations for Reforming the Tax System

Palikir, Pohnpei (FSM Information Services): December 11, 2009 - The Tax Reform Executive Steering Committee (ESC) met in Pohnpei on November 23, 2009 to further discuss the enabling legislations for the nation-wide tax reform program. The membership of the ESC consists of the Honorable Alik Alik, Vice President (as Chairman), Governor of Kosrae State, the Honorable Robert Weilbacher, Governor of Pohnpei State, the Honorable John Ehsa, Governor of Chuuk State, the Honorable Wesley Simina, and Governor of Yap State, the Honorable Sebastian Anefal. The ESC endorsed the different pieces of enabling legislation that would be proposed to Congress and each State Legislature with the exception of the State model Value Added Tax Act. Consensus was not reached on the best option for the treatment of interstate trade. Because of this, the Governors and Vice President agreed to continue their discussions on the VAT treatment of interstate trade during the Chief Executives Council (CEC) meeting held in Guam on December 2, 2009.

After much deliberation and further explanations by the technical staff, the Governors reached agreement on Friday, December 4, 2009, on the treatment of interstate trade under the VAT. This means that the Administrations in the National and each State Government have reached final agreement on the enabling legislations that would be transmitted to Congress and the respective State Legislatures. It was also proposed in this meeting that a State and National Leadership Conference (SNLC) will need to be convened in January to provide a venue for ESC to introduce the enabling legislations to the SNLC.

The ESC also agreed that there is enough substance to now begin undertaking public awareness campaign on the tax reforms. This campaign will begin once all parameters have been laid out by the committee.