Thursday, March 27, 2014

President Mori prioritizes Telecommunication Liberalization bill and Tax Reform "sunset clause" for Congress action this March special session

FSMIS (March 27, 2014): Yesterday, March 26, Federated States of Micronesia President Manny Mori emphasized in writing to Speaker Dohsis Halbert his legislative priorities for Congress' deliberation at the Third Special Session of the Eighteenth FSM Congress.

Through the "Committee to Wait on the President" on March 25, Congress indicated its preference to have such written communication for this session as opposed to the norm of a verbal exchange format at the start of session.

In line with the wish of Congress, President Mori informed the Speaker and Members regarding the two priority measures for this session: the Telecommunication Liberalization Bill and the Tax Reform Sunset Clause in the FSM Revenue Administration Act.

"As you are aware, our National Government has been engaged in an on-going effort to improve our telecommunications connectivity throughout the FSM. Central to this effort is a proposed Joint Fiber Optic Cable project connecting Palau and the State of Yap to Guam. This will greatly increase telecommunication capability and capacity, and has obvious positive impacts on both public and private sector development throughout the Micronesian Region."

The President went on to say that the FSM is pursuing a financial package with the World Bank that is contingent upon the liberalization of the telecommunication sector to create an open service provider environment and potentially more service choices for consumers.

In terms of the second measure stressed as a priority for the session, the President wrote, "The "sunset clause" in the FSM Revenue Administration Act will be triggered if Congress does not act before the end of March".

Letting the "sunset clause" to take effect will nullify the tax reform initiative pursued by the FSM and the State Governments for over ten years.

"As you are aware, the fiscal and economic situation facing us in 2023 is our major challenge. The FSM Tax Reform is necessary to improve the fiscal outlook for all of our governments, especially the state governments. The FSM Tax Reform also contains  investment-friendly policies that will improve the business environment in the FSM...I would strongly urge Congressional action to repeal the sunset clause from the Revenue Administration Act so that we can move forward with implementation of the tax reform", the President further emphasized.  

The on-going session started on March 24 and will be on for the duration of ten days, unless  shortened or extended through resolution of Congress.

For further information on this release, call 320-2548 or email


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