Login

Revenue projection for $10 Mil tax hike goes to Fono

fili@samoanews.com

The American Samoa Government is projecting to collect more than $10 million under the proposed hikes in excise tax on beer, alcohol and tobacco; a hike in business license fees; a new $2,000 corporate franchise tax and a new wage tax of 4% to fund the $10 million appropriation bill for LBJ Medical Center’s off-island medical referral program.

This is according to documents submitted last Thursday afternoon to the Fono leadership by Gov. Togiola Tulafono who wrote in a cover letter that “these are projections based on ASG’s best estimates given the information that is available to the Executive [Branch] through the Department of Treasury, Customs and Tax divisions.”

“I must also point out that when taxes are increased on imports there is a corresponding decrease in demand for these items,” the governor wrote. “However, in ASG’s experience, that trend is only short term, if at all, as every one of the subject imports has maintained at steady levels and even increases in non-disaster years despite their frequent and heavy taxation over the years.”

According to the government’s information as well as testimony given last Friday by Toetasi Tuiteleleapaga before the House Budget and Appropriation Committee, ASG is projecting to collect a net of $4.34 million under the proposed hike in the increase for beer, alcohol and tobacco.

For beer, which is a 32% increase, net revenues are projected at $845,925; for alcohol, which is a 50% hike, estimated net revenue is $154,653; and a 40% hike in tobacco is projecting a net revenue of $3.34 million.

As for the corporate franchise tax, Tuitelelepaga told the House committee that there are about 450 to 500 corporations registered in American Samoa and this is based on Treasury Department records. Under the new tax, ASG is projecting to collect $1 million.

For the increase in the business license fee, ASG forecast a net $816,000 in revenues, according to the information provided by the governor — which also notes there are 3,127 businesses.

The information further states that under the proposed 4% wage tax, ASG should collect $8 million, and if it is reduced to 2%, $4 million can be collected.

The House hearing on the proposal ended up being postponed until today to give lawmakers enough time to review the financial report submitted by the governor, because  committee members were only given on Friday morning copies of the report.

In the Senate, a committee of the whole convenes this morning to discuss the same report as well as debate any issue pertaining to the $10 million appropriations. No witnesses are scheduled to testify and the Senate is hoping to make a final decision on the bill this week.



THE NEW COMMENTS PROCESS

To make comments, you will need to register. You can register under your real name or use a 'screen' name. This way, people will be able to follow comments and make comments back and forth to each other. If you choose to use a 'screen name' no one will know your true identity. In either case, no email addresses will be available to anyone. It is an automated process. If you have questions, email: webmaster@samoanews.com

You currently are not logged in, please LOGIN to post comments.