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HAGATNA, GUAM – For health and safety concerns, the Government of Guam's Department of Revenue & Tax (DRT) made a commendable decision during the COVID-19 pandemic by temporarily waiving the credit card convenience fee for online and in-person tax payments.
This move helped prevent the spread of the virus and provided much-needed relief for businesses and individual taxpayers. Given this waiver's numerous benefits, the Guam Legislature must continue to support this policy and allocate the necessary funds to maintain it.
The convenience fee waiver has proven to be a win-win situation for both taxpayers and the DRT. It has offered taxpayers significant relief and a more efficient and convenient way to fulfill their tax obligations.
Online payments have eliminated the need for physical trips to government offices, saving time and reducing the risk of exposure to illness. Moreover, many taxpayers enjoy additional benefits from their credit card companies, such as airline miles, cashback rewards, or points toward merchandise, making them feel even more valued.
For the DRT, the waiver has streamlined the tax collection process. Online payments have led to faster and more accurate transactions, reducing administrative burdens and improving efficiency. This has allowed the department to focus on other critical tasks, such as ensuring compliance and providing taxpayer services.
While maintaining the credit card convenience fee waiver may incur costs, the long-term benefits to taxpayers and the government far outweigh these expenses. By allocating the anticipated $10 million to the DRT, the Legislature can ensure this valuable service remains available to Guam residents.
Additionally, the waiver could generate significant cost savings for the DRT. Studies have shown that online payments can reduce processing costs by as much as 25%. DRT can use these savings to offset the cost of the waiver, making it a sustainable and cost-effective policy.
Moreover, the Guam Waterworks Agency (GWA) has demonstrated that credit card fees can be absorbed without passing the costs on to consumers. Despite the Georgetown Consulting Group's recommendations to the Public Utilities Commission (PUC) to impose a 1.5% credit card fee, GWA successfully argued that it could absorb these costs. The PUC supported this decision, recognizing that both GWA and the Guam Power Authority (GPA) are governed by the Consolidated Commission on Utilities (CCU) and should, therefore, follow similar practices.
An unexpected but significant benefit of waiving the fee has been the accelerated inflow of funds into the Guam Treasury. For error-free returns, tax refunds can be processed in as little as 15 days. This tax refund velocity represents a substantial improvement from previous years when the government had to borrow large sums to pay tax refunds.
By maintaining the convenience fee waiver, the DRT can provide a valuable service to taxpayers while demonstrating responsible fiscal management. It is now up to the Legislature to take decisive action and preserve a policy that has clearly worked. By doing so, they will demonstrate their leadership in making Guam's government more efficient, equitable, and foster a more taxpayer-friendly environment. The time to act is now. Let’s not turn back on the progress we’ve made—let's keep the credit card convenience fee waiver in place for the long-term benefit of all.
The Guam Chamber of Commerce is a non-profit voluntary association of over 400 businesses, professional individuals, and firms united in their desire to improve business and build a better social and economic community in Guam.
Mr. Ernie Galito is the Chairman of the Board of the Guam Chamber of Commerce.
For additional information, contact the Guam Chamber of Commerce at 671-472-6311/8001 or email info@GuamChamber.com.gu.
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October 8, 2024
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