Gov. Lou Leon Guerrero intends to keep the 5% business privilege tax and believes the 40% deferred payment and delay on BPT payments coupled with the federal government assistance packages will be enough to help local businesses that have been adversely impacted by the COVID-19 pandemic.
During a press conference at Adelup on Wednesday, Leon Guerrero was asked if she would consider reducing the BPT, something that has been repeatedly requested by the Guam Chamber of Commerce and others in the community, to provide immediate relief.
“There is a lot of help that is coming down for the small businesses. So keeping the 5% GRT is also important because we also in the government will be receiving less revenues as a result of this (COVID-19) crisis,” said Leon Guerrero.
Two weeks ago, the governor projected the COVID-19 crisis would result in an estimated loss of $31.7 million for the local government.
On Wednesday, Leon Guerrero said she would provide an updated figure on the government’s current revenue situation later as she did not have the figures with her during the press conference.
She maintained her position that the government has been disciplined in expenses.
“At this point, no other added austerity measures other than keeping our expenses down,” the governor said.
Nonessential businesses have been ordered to shut down until April 13, and many hotels, restaurants and small businesses have been forced to reduce hours, lay off employees and close the doors.
“We have provided a 40% deferment, delay on the BPT payments until I think July would be the first payment. We can revisit the delay and deferment,” said Leon Guerrero. “I’m working very closely with the federal government.”
She said Guam has already been approved for economic disaster program loans for small businesses for up to $2 million for a 30-year period.
A survey is underway to determine the full impact of the layoffs and reduction in work hours on Guam’s private sector. While many of the workers remain employed, they are not getting paid and have asked what assistance the government can provide.
“There are many packages coming forward. I have been working with our Guam Economic Development Authority to track those packages and so that we are sure that we can be immediately accessing those moneys,” said the governor. “A lot of those assistance are going to be direct subsidies.”
Reuters reported that U.S. senators and Trump administration officials have reached an agreement on a massive economic stimulus bill to alleviate the economic impact of the coronavirus outbreak, White House official Eric Ueland said early on Wednesday.
The package had been expected to include a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 to millions of U.S. families, as well as $350 billion for small-business loans, $250 billion for expanded unemployment aid and $75 billion for hospitals, according to Reuters.
The package is expected to be worth $2 trillion, but there is no definitive time frame on when that relief will come, leaving many concerned about how they will put food on the table and pay their rent.
Leon Guerrero said she is still “considering” whether she will issue an order placing a moratorium on evictions for those who cannot pay their rent.
“I am contemplating looking at asking people not to evict the renters and I’m also asking people not to in terms of their mortgages. So I am contemplating some actions in that area,” she added.