Saipan casino operator Imperial Pacific International (IPI) has reached a financial settlement on unpaid tax obligations with the Commonwealth of the Northern Marianas Islands (CNMI).
Local media announced on Monday that a deal had been reached by the CNMI government in which IPI agreed to pay just under $18.2 m in outstanding gross revenue tax (BGRT). IPI reportedly transferred 10 million dollars of this sum to the government and promised to pay the remainder “by the end of March.”
The government had lobbied IPI on the tax issue after opposition politicians heard last summer that in fiscal 2019, IPI had charged just $41k in BGRT, down from $43.6 m the previous year. The government said IPI owed $30 million in outstanding BGRT, but IPI claimed to be owed unspecified “credits” based on the company’s belief that in previous years it had overpaid its BGRT.
IPI’s gaming licence is unique in the world of casinos since the company is not required to pay tax on its gambling income. Besides BGRT, IPI is required to pay an annual licence fee as well as to make contributions to the community chest fund, but opposition politicians say that IPI is currently $37 m in arrears to this fund.
In recent years, the Commonwealth Casino Commission (CCC) has been less than impressed by IPI and offered its support for pending legislation to give the regulatory body stronger enforcement powers. House Bill 21-11 would, among other aspects, extend the statute of limitations whereby the CCC can investigate IPI for past transgressions to 36 months from its current six-month limit.
IPI is currently the subject of a probe by the Federal Bureau of Investigation into alleged wire fraud, money laundering and conspiracy concerning political contributions to CNMI Gov. Ralph Torres, who issued a public statement last week denying that IPI had been “paid off” in exchange for political favours.