24 Oct 2002

Marshalls may increase tax for residents on Kwajalein Atoll

5:44 pm on 24 October 2002

The Marshall Islands government has indicated that it wants to impose heavier income taxes on Americans based at the US missile testing range on Kwajalein Atoll.

Under its Compact of Free Associaton with the United States, the Marshalls can tax Americans on Kwajalein at 5 percent which generates 3 million US dollars a year in revenue for the Marshalls government.

The income tax for Marshall Islanders is between 8 to 12 percent.

Our correspondent in Majuro, Giff Johnson says the government will hold negotiatons with the US to significantly increase the 5 percent tax for Americans on Kwajalein.

"The proposal that the Marshalls Islands has made is to increase that to 25 percent which would put the amount up to about 12 or 15 million a year in revenue and that is a negotiating position and even if they were able to increase it only to the level that the Marshall Islands has for its own citizens which is 8 to 12 percent it would still be a significant increase in revenue."

Giff Johnson in the Marshall Islands.