Guam News - Guam News
Guam - Vice Speaker B.J. Cruz is asking the Public Auditor to launch a review of the Qualifying Certificate [QC] program which, he suggests, could generate thousands of dollars in additional tax revenues if non-compliant or unqualified receipts are weeded out of the program.
The QC program exempts qualified local businesses from taxes in return for the company's commitment to do things like hiring local employees or provide financial support to various GovGuam or non-profit programs. It is Administered by the Guam Economic Development Authority [GEDA].
The Vice Speaker highlights a list of firms that currently receive QC's, 6 of whom are listed as "non-compliant."
In a letter to the Public Auditor, the Senator points out that it has been 11 years since the QC program has been reviewed and that 2001 audit, conducted by the Federal Government, found "at least $769,000" in lost revenue "and could lose future tax revenues totaling $70.8 million because the Authority recommended the approval of Qualifying Certificates with unnecessarily generous tax benefits."
Cruz emphasized the importance of the review because of the looming budget cuts which may result in the layoffs of GovGuam employees.
READ Senator Cruz's release in FULL below:
Cruz to Brooks: What is the Status of the Audit for the Qualifying Certificate Program?
For Immediate Release
(July 18th, 2012- Hagatna) After more than two months of waiting without an answer, Vice Speaker Benjamin J.F. Cruz wants the Public Auditor to begin her review of the Qualifying Certificate Program. This was the message Cruz expressed to the Public Auditor in a letter sent to her yesterday afternoon. The QC program administered by the Guam Economic Development Authority allows qualified island businesses to keep millions of dollars that would otherwise be paid in taxes.
Cruz wrote, “On May 7th of this year, I wrote you regarding the lack of audit coverage for the Qualifying Certificate program. I specifically noted that the last available audit of the QC program occurred nearly 11 years ago and referenced my concerns with this fact.”
Cruz reiterated his concern that according to a 2001 audit of the QC program conducted by the federal Government, GovGuam lost tax revenues of at least $769,650 and could lose future tax revenues totaling about $70.8 million because the Authority recommended the approval of Qualifying Certificates with unnecessarily generous tax benefits.
In the meantime, Cruz writes, “Governor Calvo continues to contemplate layoffs, retiree benefit reductions, and painful cuts to essential services—all while some QC recipients avoid millions of dollars in taxes without any empirically measureable benefit to the tax payer.”
Cruz also draws attention to a Certificate of Compliance list provided by GEDA. The list seems to demonstrate that while some QC holders have had their status revoked for non-complaisance; other recipients maintain that status in spite of sustained non-compliance over a number of years. Cruz believes this is even further proof that an audit should be conducted.
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