Open letter to President on Corporate Tax

March 10, 2021

Dear Mr. President:

Mwohn mehkoaros ahi tungoal wahu. It is with great honor and privilege to write on a matter very important to the livelihood of the people of Pohnpei.


Some times in 2008, FSM Government started receiving its shares (60%) of the Corporate Tax.  Subsequent to that, a question was asked whether the revenues received are subject to the requirement of Section 5 of Title IX of the FSM Constitution, which requires that not less than 50% of the revenues collected shall be paid into the treasury of the state where collected.  One of the Assistant Attorney Generals at the FSM Department of Justice was tasked to answer the question.  In her research, she concluded that the revenues should be shared as mandated by Section 5 of Article IX of the FSM Constitution.  Historically, revenues have been consistently shared with the states without any reservation since the implementation of the FSM Constitution.

The result of her work was presented to the then Secretary of Finance and Administration, Mr. Finley Perman on March 21, 2008.  And on March 24, 2008, the Secretary shared the legal opinion with the then President, His Excellency Emmanuel Mori.  In that meeting, the President did not support the sharing of the revenues from the corporate tax.  This could be authenticated by the handwritten notes on the legal opinion document; and on April 04, 2008, FSM Attorney General, Maketo Robert, issued another opinion in support of the notes referred to above.

The Betrayal


WE, THE PEOPLE OF MICRONESIA, (in capital letters) exercising our inherent sovereignty, do hereby establish this Constitution of the Federated States of Micronesia.

With this Constitution, we affirm our common wish to live together in peace and harmony, and

to make one nation of many islands, we respect the diversity of our cultures.  Our differences enrich us.

Article II Supremacy

Section 1.  This Constitution is the expression of the sovereignty of the people and is the supreme law of the Federated States of Micronesia.  An act of the Government in conflict with this Constitution is invalid to the extent of conflict.

Article IX Legislative

Section 2. (d) to impose taxes, duties, and tariffs based on imports

                   (e) to impose taxes on income

Section 5.  National taxes shall be imposed uniformly.  Not less than 50% of the revenues shall be paid into the treasury of the state where collected

Article X Executive

Section 2(a). President to faithfully execute and implement the provisions of this Constitution and all national laws.

Article XIII General Provisions

Section 3.  It is the solemn obligation of the national and state governments to uphold the provisions of this Constitution and to advance the principles of unity upon which this Constitution is founded.

Section 7.  On assuming office, all public officials shall take an oath to uphold, promote, and support the laws and the Constitution as prescribed by statute.

Article XIV Amendments

A proposed amendment shall become a part of the Constitution when APPROVED by ¾ votes of votes cast on that amendment in each of ¾ of the states.     

It is abundantly clear that the constitutional mandate of Second 5 of Article IX has not been amended to allow the National Government not to share the required 50%, especially with Pohnpei. Section 5 of Article IX is a self-executing provision and therefore, interpretation of the FSM Supreme Court is not necessary.  Historically, National Government has been faithfully sharing the 50% mandated by Section 5 of Article IX of the FSM Constitution and to do otherwise, not to share, is a dereliction of duty.  All the elected and appointed leaders of this Nation took an oath to uphold, promote, and support the laws and the Constitution of the Federated State of Micronesia.


Based on all of the above, it is earnestly requested that the current Administration corrects the unconstitutional act, which has deprived the people of Pohnpei from their rightful shares of the revenues from the corporate tax.

Respectfully submitted,

Feliciano M. Perman

Lt. Governor, Pohnpei State                                                      

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