Out of $1.6 billion worth of air cargo that flowed into Guam, only $136,000 worth of use tax was collected in 2018, states an audit report released Wednesday.
Guam assesses a 4% use tax on incoming cargo so the amount of collection could have been as high as $65.5 million – without considering all tax-exempt cargoes, the audit found.
The Office of Public Accountability “determined that GovGuam’s use tax data and processes found significant flaws and deficiencies in its manual processes including: the control, assessment, and recording of incoming cargoes; recording of assessments, exemptions, and collection of use tax; and data interface.”
The Guam Customs and Quarantine Agency processes incoming cargo.
Based on existing laws and Customs Agency’s professional judgment, GovGuam only collected $136,000 or 0.2% in use tax on air cargo in 2018, the audit found.
The audit noted deficiencies including inadequate oversight, monitoring, and coordination among Customs and Quarantine Agency, Department of Revenue and Taxation and the Department of Administration, the OPA noted.
In their official responses, all three agencies agreed and expressed their ideas in ways to move forward to address the issues, OPA noted.
Customs is procuring a Customs Management Information System that has various capabilities including receiving all airway bills and manifests electronically and will greatly help in the automation of use tax assessments, tracking of exemptions and more, the OPA stated.
Recent Comments