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Cruz accepts Muna Barnes’s request to audit military contractors’s tax liabilities

By Johnnie Rosario

Vice Speaker Tina Muna Barnes may have stumbled across a revenue gold mine for GovGuam, and Public Auditor Benjamin Cruz is intent on helping to get this done.

“Based on an audit conducted in 2008 the Inspector General the United States, the inadequate enforcement Guam’s taxes have cost the Government Guam millions dollars each year—millions dollars that could have been used to provide critical services to our People,” Ms. Muna Barnes wrote to Mr. Cruz on May 25. “According to 2014 audit conducted by the Department Interior’s Office Inspector General regarding taxation on federal contracts, the Department Revenue and Taxation lacks the infrastructure, mechanism, and manpower to collect these taxes that are due to Guam and included recommendations to improve our collection mechanisms. These recommendations include developing and

implementing business privilege tax (BPT) collection procedure for contractors conducting projects for the U.S. government on Guam with specific control elements and expanding data sources to identify contractors that may be subject BPT.”

The Vice speaker believes GovGuam is missing out on millions of dollars annually from military contractors doing business for the military on Guam. Mr. Cruz is wagering the resources of his office that she’s right.

“Based on your request, the Office of Public Accountability (OPA) will conduct a performance audit relative to business privilege tax (BPT) collected on prime and sub contractors for U.S. military projects in Guam,” Mr. Cruz wrote to Ms. Muna Barnes today.

The audit, which will cover 2016 through 2020 military contractors, their BPT returns and other documents, and their taxes, permits, and licenses paid, will determine who was required to pay taxes, whether the Department of Revenue and Taxation is doing its job, and if granted BPT exemptions are being applied legally.

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