FSMIS (September 30, 2014): In response to communication from the Federated States of Micronesia Vice President Alik L. Alik, the FSM Congress quickly summoned the Secretary of the Department of Finance and Administration, the Secretary of Justice, the Customs and Tax Administration Division, and the Tax Reform Program for a hearing at noon today.
Vice President Alik also showed up at the meeting.
The meeting was chaired by Senator Wesley Simina, the Vice Chairman of the Committee on Ways and Means, and was open to all Members.
Senator Simina stated the meeting is initiated in reaction to information received during today's session regarding the decision to start transitioning the administration of tax from the current CTA Office to the Unified Revenue Administration (URA).
Some Members indicated that they felt the URA, as a component of the tax reform program, could not be implemented given that the Revenue Administration Act's "sunset clause" went into effect last May.
Besides expressing concerns on legal matters, Congress expressed disagreement that the Executive Branch is preparing to proceed with the implementation of the URA without all the State governments' involvement in the operation.
The collective response from the Executive side was that the basis of the decision to proceed is to fulfill their roles derived from the Unified Revenue Authority Act of 2010 itself, which Congress enacted four years ago.
Some Members also wondered if implementing the URA will discourage the States of Pohnpei and Yap from coming on-board with the tax regime reforms.
Vice President Alik did not view the decision to implement the act as a way of alienating the remaining two States from the tax reform endeavor. He said he remained hopeful that National and State Leaderships will be committed to modernizing tax regime for all governments in the federation.
The URA will begin assuming its role on October 1, 2014 (tomorrow) in a transition period of three months involving the tax administration offices for the National Government, Chuuk State and Kosrae State. It is expected to become fully operational by January 2015.
Along with Chairman Simina, Congress Members who participated at the meeting were Vice Speaker Paliknoa T. Welly, Floor Leaders Singkoro Harper, Senator Joseph J. Urusemal, Senator Yosiwo George, and Senator Berney Martin.