The Leon Guerrero administration’s $40-million economic relief plan will not do much to alleviate the local business community’s ordeal triggered by the COVID-19 outbreak, the Guam Chamber of Commerce said Tuesday.
“We are concerned that the TEAM Guam Plan as presented does not truly offer relief to businesses,” the Chamber said in a statement following Gov. Lourdes Leon Guerrero’s announcement on Monday of her administration’s economic response to the coronavirus outbreak, which has caused the government of Guam's revenue stream to shrink by $31 million.
“We would like to see a true and robust relief plan from our government - a sound plan that would help small businesses, provide opportunities to protect employees, and one that one that would provide a balance,” the Chamber said.
The administration's five-point relief package, billed Temporary Economic Assistance and Mitigation (TEAM) Guam Plan, consists of deferment of a fraction of business privilege tax payment, waiver of credit card fees for government customers, small business loan offer, airline rebate and payment plan options for utilities.
“The plan defers payment of taxes, if businesses so desire, and with declining incomes, the burden becomes steeper,” the Chamber said.
Under TEAM Guam Plan, businesses can voluntarily postpone payment of 40 percent of BPT for 90 days without interests or penalties.
“Deferring business privilege tax payments for three months does not provide a company any relief if operational expenses remain status quo but income has decreased,” the Chamber said.
The business group said the plan failed to take into consideration the employers’ challenge to sustain adequate working hours for their employees, which the Chamber said is “the core problem that many in the private sector are experiencing today.”
The Chamber earlier requested the administration for a six-month postponement of the minimum wage increase, which went into effect on March 1. The governor, however, declined the group's request. Guam's hourly wage rate has gone up to $8.75 from $8.25.
While some may appreciate the administration’s loan program for small businesses under TEAM Guam Plan, the Chamber said most business owners are likely to pass up such an offer as they “would prefer not to add additional debt to their expenditures during these times of economic uncertainties.”
TEAM Guam Plan also includes a waiver of the 3.7 percent credit card fees charged to customers for use of credit cards to pay for government taxes.
“Although waiving credit card fee payments is certainly a great benefit for island residents who utilize a debit or credit card at the Treasurer of Guam, this benefit cannot be availed by many businesses that pay government fees and taxes utilizing a company check. Both proposals do, indeed, provide some positive options that businesses can avail of,” the Chamber said.
“In summary, the Guam Chamber of Commerce would like to see our government do more in stepping up its support of our Guam businesses - after all, without the business community there would be very little in our government coffers. We look forward to further dialogue and true partnership as we weather this storm together.”