President Mori maintains course on reform measures pending with Congress

President Manny Mori underscored priority items for the upcoming 3^rd Special Session of the Eighteenth FSM Congress, directing his Cabinet Members not to lose focus on effort to obtain States and Congress support of the pending Tax Reform legislation, the Overseas Development Assistance (ODA) Policy and the Telecommunication reform bill.

The President stressed that these reforms are in the best interest of the Federated States of Micronesia.

In light of such interest, President Mori had asked Congress to repeal the so-called “sunset clause” in the Revenue Administration Act of 2012 and enact the pending Net Profit Tax (NPT) along with other enabling legislations to strengthen overall tax regime. During its last session, Congress put in place a clause in the RAA that prohibits the entire tax reform to ever take place without all the four FSM States’ endorsement through the enactment of their respective Value Added Tax legislations.

Congress deferred action on the Telecom Reform Bill to review the measure more extensively. The bill calls for drastic changes by “liberalizing” market conditions and proposing a halt to the exclusive service-provider role reserved for the FSM Telecom Corporation, among other requirements. These changes are encouraged by the World Bank as conditions for grant assistance being sought by the FSM National Government with the bank.

It was reported that a few Members of Congress have signaled support of the Telecom bill after having recently obtained further information from high ranking officials of the World Bank on the institution’s involvement in strengthening communication information technology.

The ODA met opposition by skeptical Members who questioned the rationale and practicality of such policy, claiming that overseas assistance has been a part of the government since its beginning. The policy will render the process more transparent for both donor-partners and the FSM.

The President instructed Cabinet Members to commit their attention and be able to fully collaborate during the session upon request of Congress.