Lawmaker: ASPA’s fuel division costing government about $2 Mil annually
Rep. Larry Sanitoa says that the news of ASG owing $8.4 million to the American Samoa Power Authority should not come as a surprise to the community, adding that the government is losing about $2 million annually in corporate taxes on fuel since ASPA became a fuel supplier.
“As a matter of fact, no one should have the misconception that the government does not pay its bills and only the tax payers are expected to bear the cost,” he told Samoa News.
“In all fairness to ASG, the fact that ASPA chose to go into the fuel business created a huge loss to ASG’s source of revenue — Corporate Taxes,” he said. “This tax was one of the main revenue sources that helped ASG pay its bills, including subsidies to other entities like LBJ Medical Center and the American Samoa Community College.”
At last week’s Fono joint budget hearing, Sanitoa said the government is losing between $2 and $3 million annually on corporate taxes on fuel and therefore, for the past three years — since ASPA took over as a fuel supplier — we are talking about close to $9 million.
He later told Samoa News that the whole fiasco with the “ballooned utility bill” owed by ASG is the result of ASPA’s short sighted vision to go into the fuel business. (He was responding to a Samoa News story about the utility debt)
(While blaming ASPA for being ‘short sighted’, it should be noted that at the time, Samoa News reported Gov. Togiola Tulafono as supporting the move by ASPA to become a fuel supplier in order to ensure a consistent supply, at a lower price, which in the long run, he said would be good for the local consumer.)
“This in turn created a loss of millions in corporate taxes that would have been available to ASG for its local expenditures,” he said. “And now ASPA has the audacity to turn around and compound the problem by increasing utility rates that neither the residents nor the government can afford.”
“Venturing into the fuel business should actually result in break-even for ASG in offsetting its utility with the expected corporate taxes from the fuel industry,” he said.
“Moreover, the savings ASPA boasts from purchasing fuel directly should be passed on to the consumers — and that is not being done. It is ludicrous to say the least, and this is the negative effect of what happens when a “government” entity encroaches into an industry that it has no competency to manage,” he said.