Chamber of Commerce seeks clarification on Gross Receipt Tax proposal
The American Samoa Chamber of Commerce is seeking further clarification regarding the government’s new tax proposal which calls for a five percent tax on gross receipts, or the Gross Receipt Tax, which has yet to be endorsed by the governor.
The proposal, presented last Friday by ASG Treasurer Falema’o ‘Phil’ M. Pili during a cabinet meeting, is being proposed as a way for the government to generate new revenue and become less dependent on U.S. government funds and grants, which make up just over 60% of the ASG annual budget.
Chamber chairman David Robinson, who attends cabinet meetings in his capacity as chairman of the Shipyard Service Authority, voiced his concerns with the proposal when directors were given the chance to ask questions. (See Monday’s edition on more details about the GRT.)
He says the proposal would impact small businesses and requested a meeting with Pili following the cabinet meeting.
Robinson told Samoa News that he did discuss the proposal with the Treasurer and asked him to address the Chamber membership and outline the issues involved and Pili has agreed to do this. Robinson is working to set a fixed date next month for Pili to make an official presentation to members of the business organization.
Asked for comments on the proposal, Robinson said one of the main adverse issues of the GRT is the severe impact on the cash flow of small to medium size businesses as the tax has to be paid on a monthly basis or no later than the 20th day of the following month.
“Many businesses are struggling with weak cash flow as a result of poor sales and this aspect of the GRT needs to be discussed in more detail with the Treasurer,” he said.
It could be suggested, for example, that the high duty on such items as soda cans could be reduced as an offset as this is an up front payment that impacts severely on small businesses such as his, he said, adding that generally a move to simplify tax collection, to repeal the 2% wage tax and to lower corporate tax rates by 30% are all welcome initiatives.
“We need to discuss with the Treasurer the 30% dividend withholding tax and the 30% investment tax levied against non US companies and whether these are to be removed under the GRT proposal,” he said.
“During discussions with the Treasurer there needs to be clarification as to how the actual dollar sales receipts from companies are verified, as they could be under-declared by companies wishing to minimize their 5% tax remittance,” he added.
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: firstname.lastname@example.org
You currently are not logged in, please LOGIN to post comments.