Within the National and State Development Plans, the FSM is committed to the acceleration of industrial development. It seeks to encourage capital inflow from abroad, and to ensure that both the foreign and domestic investors and the country profit through the processes of growth and expansion. The development plan for the FSM places high emphasis on the role of the private sector in the development of the country. This emphasis is reinforced by the objective set forth in the plan for manufacturing and industrial sectors. The major tax is called gross receipt tax.
All businesses operating within the Federated States pay for gross receipt tax.
All businesses must file a gross revenue tax return for each calendar quarter. These returns are due January 31, April 30, July 31 and October 31. The minimum penalty for late filing is five dollars. The tax due must be paid when the tax return is filed. Wages and Salaries Tax Wages and Salaries Tax is assessed on employees income.