Yap Summit Community Sector - Yap State Government

YAP STATE GOVERNMENT
Computer Emergency Response Team (PacCERT), Pacific ICT Regulatory Resource Center (PIRRC), and ICT Capacity
Building for Pacific ACP Countries (ICB4PAC).]
The Sector through existing reviews and/or policies
U.S. Department of Interior: Report to Congress on the First 5years Review of the Compact of free Association
with the Federated States of Micronesia (2010)
pp. 15. “The value of private sector production, excluding households, … it averaged 26.8 percent in 1995-2008.”
pp. 16. “According to the IMF, the FSM was ranked 126 th in the world in the most recent Doing Business Report
from the World Bank. This ranking, the IMF notes, was not only lower than the previous one, but also the lowest
among the Pacific Island countries.”
pp. 18. “This unavoidable reduction in Compact grant and public spending translates to jobs and income, which
have so far not been replaced by gains in private sector outputs and jobs.”
pp. 18. BUSINESS AND TAXES: “the call for growth in business and, therefore, the tax base more urgent.”
pp. 18. PUBLIC INFRASTRUCTURE: “one way to increase economic output quickly is to expand public infrastructure
that would add to the productive capacity of the economy in the longer term and create jobs in the near term.”
pp. 18. INFRASTRUCTURE – TOURISM: “ Infrastructure such as improvements in roads and port and airport
facilities may particularly be helpful to tourism, which despite slow growth in recent years holds some potential …
specialty groups such as divers, the so called eco-tourists and regional and world explorers of the oceans.”
FSM: Comments from the Federated States of Micronesia on the Five Year Review of the Amended Compact of
Free Association (2011)
pp. 47. “private sector output has declined by 1.9% across the FSM from FY04 to FY08 … Yap a significant decrease.
This lackluster performance is attributable to a number of factors including delays in the implementation of
infrastructure projects, the erosion of household spending power, the continued weakness of exports, the
worldwide economic slowdown, the slumping of the nation’s tourism industry, the impacts of the global financial
markets crisis, the slowing of remittances from overseas workers and the shift in productive factors based on
consumption-induced price shifts.”
pp. 47. TAX REFORM: “The major components of the proposed reform include:
• Modernization and strengthening of Tax Administration through a unified Revenue Authority Act (URA);
• Elimination of the Gross Receipts Tax (GRT) and the Wage and Salary Tax and replacement by a 25%Net
Profits Tax (NPT);
• Introduction of a 10% value-added tax (VAT) to replace current national customs duties and state sales
taxes, as well as state ability to impose an exercise tax. “
pp. 48. “Institutional structures are the investment, employment, fiscal, monetary and external policies that
contribute to the nature of the private sector climate. The World Bank identifies each of these policy areas as
contributing to the “Ease of Doing Business” (EDB) index in a particular country. The FSM debuted on the World
Bank’s EDB index in 2009 as the 125 Th most business friendly country of the 183 countries tracked … Overall the
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