Palau Public Utilities Corporation (PPUC)was created by law to operate as a business and should operate as one, explained Minister Kaleb Udui Jr. of the concern raised by PPUC having to charge taxes to customers under the new tax regime.

PPUC CEO Frank Kyota, in July, wrote congress asking them to amend the new tax law, restoring PPUC’s tax-exempt status saying that the impact of taxing utility services will have an “adverse impact” on the customers.

Minister Udui explained that they are working to help PPUC become more self-sustainable and not have to depend on government subsidies.  He further agreed that the tax would be passed on to the customer, but the government has developed other programs to help address the costs.

Some of those programs mentioned by Udui to help with the costs include bringing solar programs to residential homes and refunding income taxes for those making $15,000 or less a year, among others.

“We have measured all of the changes under the tax reform to make things better for household sectors and individuals,” added Udui.

President Whipps at the August 17th press conference said that the PPUC’s letter “highlights the fact that people still misunderstand the new tax law” and that it is part of the government’s job to make people understand it.

PPUC will not be able to get credits under the new tax law if it is not a PGST registered business.  “They will lose more if they are not part of the PGST,” added Whipps, saying they are waiting for a letter from PPUC CEO saying they were wrong.

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