Guam faces $130 million in unpaid taxes, prompting lawmakers to debate a tax amnesty program that could waive penalties to boost collections. While advocates point to past successes with similar programs, opponents fear the biggest benefits may go to corporations rather than everyday citizens.

On Thursday, senators went into the Committee of the Whole to debate Bill 231 by Senator Joe San Agustin. The measure would establish a 2025 Guam Tax Amnesty Program, allowing delinquent taxpayers to pay what they owe, while penalties and interest are waived.

The goal: recover unpaid taxes quickly and provide immediate revenue to the Government of Guam without raising new taxes. San Agustin’s proposal comes as the island faces ongoing fiscal uncertainty.

A “fragile and undiversified economy” combined with a sharp decline in tourism has strained local revenues. And while military spending has helped in the short-term, that growth is expected to slow.

Senator San Agustin said, “Today there’s about $130 million in uncollected taxes. The opportunity for the Government of Guam to eliminate these delinquent taxes stands before us.”

But broader figures presented to lawmakers by the Department of Revenue & Taxation show the problem is even larger, with roughly $245M in total tax receivables on the books. That includes roughly $116M in penalties and interest, which would be reduced or waived under a tax amnesty program, depending on participation.

Lawmakers pointed to a similar program implemented in 2018, which collected just over $30M from about 900 taxpayers – out of a $35M goal – as evidence of a program success.

And as focus shifted to how the program would be structured, some senators questioned whether it goes too far. “A rolling tax system program that’s codified versus a direct targeted tax amnesty program, which has specific dates, and that’s the problem – I think – with this," commented Senator Sabina Perez. “It undermines the fairness where those taxpayers that are willing to pay their debt, pay their taxes – even on payment plans . Then there are others that – I mean, I could totally see it benefiting delinquent taxpayers that sort of game the system.”

Later in session, lawmakers rejected an amendment that would have required specific financial conditions before triggering an amnesty program, keeping the authority more flexible.

They did approve some key changes, however, including removing employer withholding taxes from eligibility.

“If you have an employee…you pay the taxes," San Agustin noted.

Lawmakers also allowed administrative fees to help Rev & Tax manage the program. Still, concerns remained over how much revenue could be lost through waiving penalties.

Senator Therese Terlaje said, “Who’s going to bear the impact of that?”

Others questioned whether the biggest benefits would go to large corporations. As the bill is projected to exist under Chapters 24 and 26 of Title 11 of the Guam Code Annotated, this program could also apply to taxes including the Business Privilege Tax, corporate and individual income taxes, and more.

After amendments, Bill 231 was ultimately moved forward to the Third Reading File, but the divide remains between those who see tax amnesty as a practical solution and those who warn it could reward those who wait to pay.