Chamber of Commerce says most small businesses still struggling
Despite an independent auditor’s report that the territory’s economy remains positive, the Chamber of Commerce says American Samoa’s economy remains weak, with unemployment still high and small businesses continuing to struggle with weak cash flow.
Seattle-based Moss Adams LLP said in the Single Audit report for ASG for the period ending Sept. 30, 2012 that despite economic setbacks in 2012, the territory’s economic outlook for FY 2013 going forward “remains positive,” adding that the Lolo Administration took office in January this year “and with it a new direction” in which the governor “set a bold agenda focused on spurring economic development, improving the quality and efficiency of government services, and marshaling the resources necessary to restore the Territory’s crumbling infrastructure.”
Responding to Samoa News request for comments, the Chamber said in a statement that there are “some bright spots in the economy” as mentioned in the auditor’s report, such as the continued development of the Tri Marine International’s Samoa Tuna Processors cannery operations, the continued efforts by the American Samoa Visitor’s Bureau to bring cruise ships to the Territory and the continued development of the ASG owned shipyard.
Additionally, StarKist recently announced its intention to expand its tuna pouching operations in American Samoa.
“However, the general state of the economy remains weak, and most small and medium size retailers and wholesalers continue to struggle with weak cash flow,” the Chamber said. “Unemployment remains high, inflation continues to rise as commodity prices increase, and disposable incomes continue to remain under pressure.”
Moreover, the Lolo administration continues to try and find ways to improve the economy “and the results are bound to show in the medium to long term, but as of now, times are difficult for most businesses.”
“What is needed is new investment that will lead to job creation,” the statement says.
Gov. Lolo Matalasi Moliga has publicly stated his administration’s commitment to work with the private sector to improve the local economy, thereby creating new jobs.
Meanwhile, the Chamber chairman David Robinson said last week that ASG Treasurer Dr. Falema’o ‘Phil’ M. Pili will address the membership at 12noon on Thursday (Sept. 12) regarding the Gross Receipt Tax proposal, which calls for a 5% tax on all gross receipts for all businesses, semi autonomous entities, including non profit organizations except religious groups. This will result in the elimination — in three years time — of the territory’s Corporate Tax.
The GRT, not yet endorsed by the governor, would also repeal the 2% wage tax currently paid only by wage earners and reform local tax laws, which are currently using the 2000 tax code.
Robinson asked Chamber members to provide their input on this proposal prior to the meeting. Among the issues Robinson says needs clarification by the ASG Treasurer is how the actual dollar sales receipts from companies will be verified, since they could be under- declared by companies wishing to minimize their 5% tax remittance.
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