KOSRAE, Federated States of Micronesia – November 26, 2025 – As part of the ongoing national effort to advance tax reform and modernization, the Federated States of Micronesia (FSM) National Task Force on Tax Reform (NTFTR), led by Vice President and Chair the Honorable Aren B. Palik, conducted a series of official engagements with the Kosrae State leadership on November 21, 2025.
The delegation began with a courtesy visit to Governor Tulensa W. Palik and Lt. Governor Arthy G. Nena. During the meeting, the Vice President outlined the purpose of the visit and provided a brief overview of the Task Force’s goals, progress made, and areas still pending review. The delegation engaged in meaningful dialogue with Governor Palik and Lt. Governor Nena, underscoring the importance of strengthened collaboration between the National and State Governments to ensure shared understanding and the successful implementation of future tax reforms.
The Vice President and the delegation also held a courtesy meeting with Speaker Semeon J. Phillip and members of the Kosrae State Legislature. Discussions underscored the importance of sustained partnership between branches and levels of government, as well as the need for broad and informed awareness as tax reform initiatives move forward. The meeting further provided an opportunity to address inquiries from the Legislature and reaffirm the National Government’s commitment to open dialogue, cooperation, and shared responsibility in advancing these reforms.
Following the courtesy calls, the Vice President chaired a stakeholder engagement session with leadership from the Executive, Judiciary, Legislature, and private sector. The consultation served as an opportunity to update Kosrae stakeholders on the national tax reform agenda and gather feedback on priority issues.
The delegation presented the status of major reform initiatives, including the National Consumption Duty Bill, ongoing revenue enhancement efforts, and the proposed transition from the Gross Revenue Tax to a Net Profits Tax. The introduction of a Value Added Tax and a proposed increase to the wage and salary tax threshold were also discussed. Brief updates were provided on tax administration modernization, including digital systems aimed at improving efficiency and compliance. Speaking on behalf of the Kosrae leadership and all participating members, Speaker Phillip expressed sincere appreciation for the delegation’s visit and reaffirmed the State’s commitment to working collaboratively with the National Government in advancing these important reforms.
Vice President Palik expressed his appreciation to the Kosrae State leadership, Legislature, and stakeholders for their constructive engagement and valuable input. He reaffirmed that the National Government remains committed to working closely with all states to promote a fair, modern, and sustainable tax system for the Nation.
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