Overview:
Lawmakers are considering a proposal to remove the 10% PGST from funeral and mortuary services, aiming to ease the financial burden on grieving families. While the bill has broad support, questions remain about whether the tax break will actually lower costs — and whether it could open the door to more exemptions.
By: Eoghan Olkeriil Ngirudelsang
NGERULMUD, Palau (Feb. 24, 2026) — “Exempting mortuary services from the 10% PGST will stop additional tax burdens from being passed on to grieving families,” a House delegate said Tuesday as lawmakers advanced a bill aimed at reducing funeral costs in Palau.
House Bill No. 12-43-5S, introduced by Delegate Soalablai of Peleliu during a special session of the House of Delegates, proposes removing the Palau goods and services tax (PGST) from mortuary and funeral-related services. The measure is intended to ease the growing financial strain on families during bereavement.
Soalablai said the proposal reflects Palauan cultural practices, where families and communities come together to support funeral arrangements and often shoulder significant expenses.
“In light of continuing funerals, we have a culture of coming together where families pay for mortuary and funeral expenses of their deceased loved ones,” he said. Removing the tax, he added, would prevent service providers from passing the added 10% cost on to families.
The bill received general support from delegates but also prompted questions about its potential impact.
Delegate Ngirmechaet of Ngchesar noted that Palau’s mortuary services are operated by a private business and cautioned that removing the tax does not guarantee prices will decrease.
“Exempting them from the PGST will not necessarily mean the cost of services will go down,” Ngirmechaet said.
Delegate Marino of Hatohobei raised broader fiscal concerns, warning that granting an exemption for one service could lead to similar requests from other sectors.
He said that while funeral costs are high, many families are struggling with daily living expenses. “The Palauan people need some form of relief in everyday costs, such as utilities or food,” Marino said.
In support of the measure, Delegate Sinsak of Ngarchelong said removing the tax would eliminate an added charge that is often included in funeral bills and borne by grieving families. He also argued that the exemption would have minimal impact on government revenue, noting that PGST collections from mortuary services represent only a small portion of total tax income.
The bill passed its first reading and was referred to the House Committee on Ways and Means for further review.
If approved, the measure would provide targeted tax relief at a time when lawmakers continue to face growing public concerns over the cost of living in Palau.