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Senate passes bill to reduce 30-day grace period in paying excise tax

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THE Senate last week passed a bill that would reduce to 15 days from 30 days the grace period when paying the excise tax.

All the nine senators voted to approve House Bill 21-104 as amended by the Senate. Sen. Frank Borja, who was on Tinian, attended the session via teleconference.

Senate Floor Leader Justo Quitugua, left, confers with Senate President Victor Hocog, during a break from Senate session on Tuesday last week. Photo by Emmanuel T. Erediano

House Floor Leader John Paul Sablan’s H.B. 21-104 originally proposed to eliminate the 30-day grace period to address the concerns of the Division of Customs about some importers who have not been paying their excise taxes.

Customs said these short-term or one-time importers are “high-risk” importers who tend to violate Customs laws.

The Senate Committee on Fiscal Affairs amended the bill to consider the concerns of long-term or low-risk importers who pay their excise tax on time.

Like the House, the Senate committee believes that the Customs director can promulgate rules to give low-risk importers flexibility when paying excise taxes.

The senators said these rules should also “provide minimum deferred payment grace periods of 30 days and 15 days, respectively, for post-clearance payments for qualified low-risk importers.”

Prior to the roll call vote, Sen. Paul A. Manglona raised a question about the applicability of the bill to Rota, which receives imported items from Guam.

Senate Vice President Jude Hofschneider, who chairs the Senate Fiscal Affairs Committee, said the rules that will be promulgated by Customs will address Manglona’s concerns.

The measure now returns to the House of Representatives.

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