The real issue isn’t the tax. It’s Guam’s economy

By Ed Untalan

Over the past 39 years, I’ve had the privilege of working with thousands of Guam businesses. Some were family-owned companies employing only a handful of people. Others were among the largest employers on our island. I’ve seen businesses succeed and I’ve seen businesses fail.

One lesson has remained remarkably consistent. Large businesses and small businesses operate exactly the same way. The only real difference is size.

Every business needs customers. Every business needs revenue. Every business has expenses. If customers stop buying what a business sells, eventually the math catches up. That’s why I believe we’re asking the wrong question.

Much of today’s discussion has focused on the business privilege tax. While tax policy is important, it isn’t the real issue.

For several years, the Guam Chamber of Commerce has consistently sounded the alarm that businesses across our island are hurting. We’ve watched internationally recognized brands leave Guam while many locally owned restaurants, retailers, and service businesses have quietly closed their doors. Different names. Different sizes. The same problem. Not enough customers.

Tourism remains well below the levels many businesses depend upon, while operating costs continue to rise. When revenue declines, and expenses continue increasing, every business, regardless of size, faces exactly the same challenge. The math eventually wins.

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That’s why I don’t believe we should divide businesses into “small” and “large.” One may employ five people. Another may employ five hundred. Both depend on customers. Both create jobs. Both support families. Both struggle when the economy struggles.

One of the most misunderstood parts of this discussion is the business privilege tax itself. Unlike an income tax, Guam’s business privilege tax is generally based on gross revenue, not profit. Businesses pay it before many of their operating expenses have been paid.

Some have suggested that reducing the Business Privilege Tax simply benefits business owners. After nearly four decades working with Guam businesses, I can tell you the reality is much more complicated. Government isn’t writing businesses a check. Government is simply choosing to take less of the revenue businesses have already earned.

Preserving the scheduled reduction to 4% will not solve Guam’s economic challenges by itself. The Chamber has never suggested that it would. What it does is give businesses a little more room to breathe. For some, that may mean keeping an employee during a slow tourism season. For others, it may mean replacing equipment, reducing debt, investing in their business, or simply keeping their doors open. Every business is different. That flexibility doesn’t guarantee success. It simply provides businesses with a better opportunity to succeed.

Government has responsibilities too. Just as businesses continually adapt when revenues become constrained, government must continually evaluate how taxpayer dollars are being invested, improve efficiency, redeploy resources where they are needed most, and ensure every dollar spent produces meaningful results.

That’s why the Chamber has consistently demanded greater accountability through Performance-Based Budgeting. Government exists to serve the people. But serving the people also means creating an environment where businesses can succeed, jobs can grow, and families can build a future here on Guam.

If we truly want stronger government revenues, stronger public services, and greater opportunities for future generations, then our first priority must be rebuilding Guam’s economy. That means revitalizing tourism. Encouraging investment. Supporting businesses of every size. And making Guam more competitive.

Because when businesses succeed… People work. Families prosper. Communities grow. Government revenues grow naturally because the economy itself is growing.

That is the conversation I believe Guam should be having. Not simply how we divide a struggling economy.

But how we grow it.

Ed Untalan is the 2026 Chairman of the Board of the Guam Chamber of Commerce. The chamber is the island’s leading business advocacy organization, representing the interests of its membership through civic engagement, policy advocacy and programs that strengthen Guam’s economy.

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