Letter to the Editor: Tax Reform

Dear Editor:
The four States in the Nation constituting what is so called the Federated States of Micronesia are facing financial challenges while the parenthood is extravagantly enjoying an unprecedented surplus ever recorded in the history of this Nation. Even before reaching this unprecedented surplus level, numerous attempts have been made by the leaders of this federation to salvage the states from further slipping into insolvency and yet none has worked out up to this point in time.
One of the attempts was on tax reform to essentially establish a Unified Revenue Authority (URA) which would in essence centralize the revenue and tax divisions of the national and states into a single entity and placing it as a component unit of the National Government. This was one that I truly favor as it has a potential to work out well for all concerned. Even more so the States will benefit a little more compared to the current tax structure where the National level receives more share of the pie. The National Government has more sources of revenue coming into its treasury plus the fact now that the fishing fees and the corporate tax are drastically pouring in more monies lately.
The Mori Administration officially engaged in the implementation of the tax reform by establishing the URA to test it out. Although it was short lived, we have not had the fullest potential to test out its workability. But within a short testing period, there was a significant progress in the collection of our taxes. A sunset clause built into the National statue was expired and here we are at square one again maintaining the status quo of the old tax regime. The most critical reason why it is a must to reform our current tax structure was that the five governments were not and are still not able to collect forty percent of every one dollar supposedly due to our treasuries. This was not a made up story; it was a reoccurring finding audit after audit by external auditors. Reforming our tax laws at the state and national levels will enable our governments to collect the uncollectable (forty percent) under the current tax structure. The State of Pohnpei alone is projected to collect no less than five million dollars annually.
In a meeting held at the Legislature chamber arranged by the new Administration attended by the Vice-President of the Nation, this issue of tax reform was raised. Yes, it was clear that the sunset clause was lapsed but it does not necessarily mean that the National Government cannot revisit the issue and to revive it to assist the States with their financial constraints.
In the last States and National Leadership Conference held in the State of Kosrae, the issue of tax reform was brought up again by the State governments. I am grateful to acknowledge the strong support of the SNLC in its commitment to continue pursuing our efforts in this area of tax reform. The States look forward to its prompt implementation as this is a matter that is in our best interest to safeguard us from accumulating deficits as was revealed by a survey made by then a Statistic, Budget and Office of Compact Management economist.
The State governments are in dire need of generating more revenue streams to avoid further accumulation of deficit and at the same time support the necessary services our people deserve to receive. We have no choice at this juncture but to increase our current sales tax rates and/or the imposition of a new service tax. These are works in progress. This is the authority we have control over as it is within our jurisdictions. The consequence of this action by the States will translate to higher costs on all imported goods and services provided in the States. This action will burden all walks of life especially our disadvantaged citizens. I do not want this scenario to happen as it will severely have an impact on our disadvantaged citizens.
I am praying and hoping that our current FSM President and our current FSM Congress revitalize the tax reform namely the Unified Revenue Authority agreed to by the leaders of this Nation in 2003 to replace the existing tax system. This is an equitable tax scheme for all stakeholders which include the customers, businesses and of course our governments.
Did you know that the component of this tax reform applying to the businesses of the land has become a law of the Nation for about three years now?
After this component became law, our businesses started to pay their taxes based on their net profits. They previously paid their taxes on the gross receipt tax. This is a disadvantage for our governments because it means our businesses pay less amount of money on their taxes whereas it is an advantage for them as they are paying lesser amount of money on their taxes. So if the businesses have gotten their good share of the tax reform, when will the advantages apply to the customers and our governments be realized? It is only through the comprehensive implementation of the tax reform not a portion of it.
Revisiting the tax reform through its revival at the Nation level is a must do for the States. I have a strong conviction that the States will do their part in passing their legislations because we have no other option other than to pass sales tax increase in rates and/or establishing a new service tax for our survivability. I understand some of the States have already done some of it out of desperation not because they wanted to do so. I strongly believe that the most viable option for all of us to collectively undertake at this time and not to heavily burden our citizens most especially the disadvantaged ones is for our responsible leaders to revive the full context of the tax reform for the benefits of the people and governments of this Nation through the establishment of the Unified Revenue Authority.
The URA performed progressively well within such a short period of time. What is at stake in not having the other components of the URA become law of the Nation?
Ausen T. Lambert

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Health Corner 3 - Knowing more about Non- Communicable Diseases (NCDs)

The four main NCDs are: Cancer, Cardiovascular Disease, Diabetes and Chronic Lung Diseases. The NCD rates are higher and rising among lower income countries and populations.
The World Health Organization (WHO) defines Chronic Respiratory Diseases (CRD) as chronic diseases of the airways and other structures of the lung. The most common are: asthma, chronic obstructive pulmonary disease (COPD), occupational lung diseases and pulmonary hypertension.
These diseases have a high morbidity rate, as well as disability and premature mortality, specifically asthma and chronic obstructive pulmonary disease (COPD).
Risk factors include: tobacco smoke (either active smoking or secondhand smoke), air pollution, occupational chemicals and dusts, and frequent lower respiratory infections during childhood.
CRDs are not curable; however many cases of COPD are preventable by avoiding or stopping smoking.Treatment can relieve symptoms, improve quality of life and reduce the risk of death.
According to the latest WHO estimates (2004):
64 million people have chronic obstructive pulmonary disease (COPD).
More than 3 million people die each year from COPDs, an estimated 6% of all deaths worldwide.
More than 90% of COPD deaths occur in low-income and middle-income countries.
235 million people suffer from asthma, a common disease among children.

From the perspective of Integrative Medicine, if we consider the element air in this topic, we could say that air marks the start and end of our life, since the first breathing allows us to live and the last one takes us to death. We all share the air with humans and other species.
The air is related to breathing. Breathing is the beat of the Universe. We inhale and exhale as the Universe expands and contracts. Breathing connects us with the universe.
If you want to try an exercise to breathe like a person with COPD does, take a straw, close your lips around it, pinch your nose and breath only through the straw in your mouth… inhale… and exhale... inhale… and exhale… You have the privilege to take the straw away and breath in and out to all your healthy lung capacity; 64 million of people in the world cannot.
How can I prevent, or help my family prevent, Chronic Respiratory Disease? Let’s review the risks factors:
Tobacco smoke contains more than 7,000 chemicals, including hundreds that are toxic and about 70 that can cause cancer*. If you are a current smoker, find the support needed to stop smoking. According to the CDC, the only way to fully protect nonsmokers is to eliminate smoking in all homes, worksites, and public places. We are responsible to reinforce the law and make those spaces clean.
Air pollution: indoor air pollution, resulting from solid fuel used for cooking and heating and outdoor air pollution. Maintain ventilated spaces, avoid smoke from cooking or wearing a mask if you can’t avoid them. Plant trees that will help the environment.
Occupational chemicals and dust: people working in these conditions should wear special protection.
Avoid Frequent respiratory infections during childhood: Having a good immune system as a result of a healthy lifestyle will help prevent and fight respiratory diseases at any age, especially during early years.

Mabel Loján, MD

Integrative Medicine
*: U.S. Department of Health and Human Services The Health Consequences of Smoking—50 Years of Progress: A Report of the Surgeon General. Atlanta: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2014 [accessed 2017 Oct 18]).

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Health Corner 2 - What can we do about non-communicable diseases (NCDs)?

Have you heard about NCD? NCD stands for Non-Communicable Diseases, which means it is not caused by something infectious and is not-infectious.
In my perspective, NCDs are not only non-transmissible but are also preventable.
NCD is a group of diseases that because of their characteristics, are chronic with a slow progression and most of them can cause “sudden” deaths or affect the quality of life of the sick person.
Some of the diseases under the NCD umbrella are: Cancer, Cardiovascular disease, Diabetes, Chronic Lung Disease.
The concern surrounding NCDs is that these diseases are the leading causes of death and disease burden worldwide. It is estimated that more than 30 million of annual deaths are due to NCDs.
Micronesia and the Pacific Region are not exceptions. The data has placed the Region in “an NCD Crisis”. Forum leaders have recognized the situation as a ‘human, social and economic crisis requiring an urgent and comprehensive response’.
WHO surveys show that three out of every four deaths in the region are NCD related and the Pacific has some of the highest rates of these diseases and their causes in the world.
World Health Organization (WHO) performed a survey in Pohnpei. The 2008 report showed some information on the risk factors related to NCDs.
According to the WHO, a risk factor is any attribute, characteristic or exposure of an individual that increases the likelihood of developing a disease or injury. Some risks factors can be modifiable, like habits or exposures. Other risk factors like age or gender cannot be modified.
Risks factors for NCDs are all those habits that increase the chances to develop Cancer, Diabetes, Cardiovascular (Heart) and Lung Disease. Some of them are: high blood pressure, tobacco and alcohol consumption, betel nut chewing, low or lack of physical activity, being overweight or obese, non healthy eating (the survey used number of servings of vegetables and fruits).
Some of the important results of the 2008 WHO survey in Pohnpei are:
25% of the population smoked tobacco daily,
26.9% of population chewed betel nuts daily,
35.1% of men drank an average of 5 or more standard drinks per day in the past week,
68.9% of the population consumed sake (kava),
81.8% of the population consumed less than five combined servings of fruit and vegetables per day,
64.3% of the population had a low level of physical activity,
73.1% of the population was overweight, 42.6% were obese,
32.1% of the population was diabetic.

What do these numbers mean? In terms of lifestyle, we can improve in order to prevent deaths in our families.
If we go back to the concept of the lost balance that causes the illness and we apply it to NCDs, keeping in mind that there are known risks factors for this group of diseases, the crisis can be managed by stopping the risk factors We start new protection factors or healthy habits.
One in every three people in Pohnpei is Diabetic. Diabetes is one of the NCDs that is affecting the quality of life of our families and friends.
Every day we can choose to have healthy habits. Every meal can be feeding NCDs or fighting them. We all can start changing these figures and make Micronesia not only a paradise to live in but also a healthy country.
Mabel Loján, MD
Integrative Medicine

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