A tax official at ANZ Amerika Samoa Bank has testified that an amendment to the tax law being proposed by the administration would allow the bank to access more capital for loans without having to pay a 30 percent withholding tax under existing laws.
Daniel King, a tax counsel for ANZ said the bank would like to borrow surplus funds from ANZ's subsidiary in Guam.
"But under our tax code if they do that, everytime the money goes back and forth there is a 30 percent tax on that. So it makes it impractical for the bank to do that it costs the bank too much so they can't get the money from Guam down here under the current tax code. If they were in Hawaii or California they could do that under our existing law. So all this does is extend the same thing down to Guam and other existing territories."
Daniel King says the withholding tax is part of the internal revenue code that was adopted as part of the Territory's tax code, but should be amended to encourage more foreign investment.