Proposes subsidies for household electricity bills

Senate Ways & Means Committee Report on the Supplemental Budget bill proposes limiting business price markup (added value) on goods not to exceed 30%.  The 30% markup is not inclusive of PGST.

The report states, “The issue of double taxation and excessive pricing by retailers due to misunderstanding and improper imposition of the PGST has resulted in public distress over the prices of goods.”

The recommendation also said that a price increase over 30% would be considered a violation of the tax law.   “Therefore, the Committee recommends limiting value added or a markup to 30%, including the PGST, making any increase in price above this threshold a presumptive violation of RPPL 11-11.”

The Committee recommends amending the PGST law to require that prices on the PGST invoices be inclusive of the PGST amount.

Lastly, it recommends rate subsidy to Palau Public Utilities Corporation to keep PPUC from increasing utility costs due to PGST imposition on PPUC.

PPUC CEO Frank Kyota argues that the subsidy will not be a PPUC subsidy but a consumer utility subsidy. The proposed amendment authorizes $2.45 million and appropriates $2.24 million for FY 2023 to subside the Automatic Fuel Price Adjustment Clause and the Lifeline Subsidy Program.  Of the amount, $1.85 million comes from local revenue, and $400K comes from the Cyclical Reserve Fund.

The Senate W&M Committee report was adopted on March 30, 2023. 

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