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P.O. Box PS 3 Palikir, Pohnpei 96941
T: (691) 320-2324, F: (691) 320-5122

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Congress Passes Supplemental Budget For Tax Reform and Other FY13 Requests

PALIKIR, POHNPEI. May 27, 2013. -
On May 23, 2013, the 18th Congress of the Federated States of Micronesia on the 13th day of its First Regular Session passed Congressional Bill 18-01 D1 approving a supplemental budget request of $707,338 for fiscal year 2013. Of the total appropriation, $72,000 of this supplemental budget appropriation goes toward the FSM Tax Reform initiative which now stands at a crossroad.

In recommending full funding on the Tax Reform supplemental request, the Committee on Ways and Means emphasized in its Standing Committee Report to Speaker Halbert that outside donors contributing to the Tax Reform efforts should be made aware that the legislation has not been fully enacted and the outcome of the Tax Reform is still “uncertain”. The Committee further added that it will not recommend funding for the Tax Reform project for fiscal year 2014 if “no further progress” has been made by the end of July 2013. These Committee discussions on the Tax Reform are in accordance with past congressional actions relating to the Tax Reform initiative.

In May 2012, the 17th FSM Congress during its First Regular Session passed Congressional Bill 17-15 D1, now Public Law 17-50, establishing the Revenue Administration Act (RAA) of 2012. Section 934 of the RAA of 2012, known also as the Sunset Clause, reads that the RAA will be “null and void” if any of the four FSM States does not pass into law value added tax legislation. The 17th Congress during its Fifth Regular Session passed Congressional Bill 17-176, now Public Law 17-83, amending the deadline of the Sunset Clause from April 19, 2013 to July 19, 2013. To date, not all four FSM States have passed into law its State value added tax legislation.

In addition to the $72,000 supplemental budget appropriation, Congressional Bill 18-01 D1, which has yet to be signed into law by President Mori, also includes the following approved supplemental budget requests:

  1. FSMIS Project: $253,700
  2. SBOC – Contractual Services: $10,000
  3. President’s Office – Medical Referral: $33,355
  4. Congress – Session Travel: $55,000
  5. National Department of Education: $100,891
  6. COM-FSM SEG: $6,602
  7. Department of Foreign Affairs: $176,200

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