Guam's delegate in the U.S. House of Representatives has introduced legislation that would put the collection of Guam’s cigarette taxes and the fight against cigarette smuggling on Guam under federal control.
After more than a year in which a local law mandating cigarette tax stamps has not been implemented, Del. Michael San Nicolas announced on Monday he has introduced H.R. 4365 "to assert federal authority over cigarette smuggling on Guam."
H.R. 4635 amends Title 18 of the U.S. Criminal Code to include Guam under federal jurisdiction for cigarette enforcement.
Since Guam increased its tobacco tax by 200% in 2010, local numbers have indicated that, every three years, at least 98 million cigarettes on island go untaxed, amounting to a loss to the people of Guam of approximately $14.6 million, the legislation states.
San Nicolas stated when he was a Guam senator, he passed local law mandating tax stamps "to end apparent tax evasion and cigarette smuggling on Guam; however, this local law remains unenforced, and the people of Guam do not deserve to be shortchanged by a failure to enforce local law."
Delegate: Uncollected taxes would have funded health care
"The $14.6 million in uncollected cigarette taxes would have funded GMH, cancer treatments, and programs to address addictions," San Nicolas stated in a press release. "Failure to collect adds to our deficits and unfairly reinforces arguments to raise taxes on everyone else because a select few get away with not paying what is owed," he added.
If the law is passed, the federal Bureau of Alcohol, Tobacco, Firearms and Explosives and other federal agencies will be able to act on cigarette smuggling activities and adjudicate violations with federal prosecutors.
"When we have local laws on our books to resolve our problems, local leaders have an obligation to act. This is one of several examples we have seen where local laws go unaddressed at the expense of the people of Guam, and we will act as necessary to end this form of corruption," San Nicolas added.