July 29, 2013

By Bill Jaynes
The Kaselehlie Press

July 19, 2013 Pohnpei, FSM - Just in time, the FSM Congress passed an amendment to the tax reform law yesterday morning. The amendment moved the deadline for the States to act from July 19, 2013 to midnight on September 30, 2013. If by September 30, 2013 any of the four states of the Federated States of Micronesia have not passed value added tax legislation into law the entire tax reform act becomes null and void.

The prospects for extending the deadline did not initially look good. For the first time in FSM history Congress did not have a quorum on the opening day.

According to correspondence between President Manny Mori and Speaker Dohsis Halbert, communication between the Executive and Legislative branches was less than perfect. Congress was under the impression that there would not be a special session and several Senators had arranged business travel.

Just the same, this morning President Mori signed the amendment into law during a signing ceremony that included the State governors, or acting governors, and Speaker Dohsis Halbert.

One of President Manny Mori's stated goals when he called the special session that was scheduled to begin on July 15 was for Congress to consider pushing the deadline back before the previous deadline expired.

The president would also like to see Congress eliminate the "sunset clause" entirely and to allow those States that are ready to implement the tax reform to begin the transition process whether all States are ready to move or not.

Before the start of the special session he sent a bill to Congress for their consideration that would accomplish just that.

He also submitted letters from each of the State Governors or Acting Governors. The letters stated their support for the Tax Reform process and asked the President to continue his efforts with Congress to ensure that tax reform becomes a reality. The letters also asked for more time as the State executives continue to work with legislators in order to pass laws needed in the States before implementation can begin.

In another communication to Congress, President Mori attached a legal opinion issued by April Skilling, FSM Secretary of Justice. "The Tax Reform may proceed without all the four States taking part in the reform," the opinion said in short form. It went on to provide an analysis of the legal matters supporting her conclusion.

There is no indication that Congress will consider President Mori's new bill during the current special session but with the extension of the "sunset clause" there is time to consider it during the regular session in September.

"At their meeting, the Committee (Congress Special Committee to Wait on the President) expressed that Congress is willing to reconsider the Sunset Clause. At the same time, the Committee indicated that Congress would not be interested in having less than all five governments coming together in favor of the tax reform. Congress wants an "All- Or-None" situation," wrote the President's Information Officer in an email.

That point of view was not expressed in the Committee report to Congress.