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Treasurer will not waive “at this time” tax on longliner fish

reporters@samoanews.com

Despite a recent legal opinion by the Attorney General’s Office, the ASG Treasurer Dr. Falema’o ‘Phil’ Pili will not waive “at this time” the excise tax on fish caught by longliners in American Samoa’s Exclusive Economic Zone (EEZ), saying that among other issues, verifying whether the fish were, in fact caught in territorial waters must be resolved.
 
Local businessman Carlos Sanchez,  president of Longline Services, Inc. and owner of six local longliners, revealed to Samoa News last week that it took the longline boat owners more than ten years to prove to the ASG Treasurer — in previous administrations — that fish caught in American Samoa waters by American Samoa flagged vessels do not need to pay the 5% excise tax on fish, because it is harvested in American Samoa.
 
“Finally, a couple of weeks ago, the Attorney General’s Office issued a legal opinion clarifying what we have been saying all along,” he said.
 
Responding to Samoa News questions, Pili confirmed that a “recent opinion” issued by the AG’s Office states that fish caught in the American Samoa EEZ ”are exempted from paying excise taxes.”
 
“However, question gives rise to the fact as to how do we verify that these declared fish are caught within the prescribed EEZ or outside of the EEZ?” said Pili.  “At this point, it is very difficult to draw a conclusion on this issue,” he said, adding that “we are currently reviewing this issue and I have no plans to waive it at this time.”
 
Last week, the Tautai o Samoa Longline & Fishing Association announced in a news release that owners of the local longline fleet reached a consensus to tie up their boats and they further agreed to “post all fishing vessels FOR SALE as the future of this fishery or support for the fishery does not seem imminent.”
 
Longline fleet boat owners cited several reasons for the move, such as the low price of albacore tuna catch, and stiff competition from Chinese government subsidized fishing boats.
 
During a meeting on Sept. 3  this year between longline boat owners and Commerce Department director Keniseli Lafaele, one of the issues to be discussed was the 5% excise tax, according to a copy of the agenda provided to Samoa News.
 
“U.S local longliners that fish within the EEZ should not be charged 5% excise tax, as this is the same as the ‘alia’ that fish within U.S/American Samoa waters. Instead, more effort should be made towards charging foreign-flagged fish and fish caught outside of American Samoan waters,” the owners argued.
 
Asked about the outcome of the discussion on the excise tax issue and the Lolo Administration’s stand on waiving the excise tax, Lafaele told Samoa News late last week that this is one of the issues being discussed and addressed by the special committee appointed by the governor to identify problems faced by the local fleet of long liners. The committee is also tasked with coming up with solutions to assist them with their plight.
 
Lafele also said the committee is meeting soon to finalize their recommendations for submission to the governor for his review. “Suffice it to say that all their issues are on the table and are being addressed,” he said.
 
Among the concerns voiced by the local longliner fleet is the lack of dock space, and having to pay double for docking at the marina. In their agenda for discussion with Lafaele, boat owners suggested allowing the harbormaster to assign any dock space to boats depending on availability and demands of port users. This would include the marina area or other port areas not directly under jurisdiction of Port Administration.
 
“Vessels should not be penalized with additional port fees for docking at a certain area due to limitation of space in the main dock area,” said the boat owners.
 
Also of concern are the clearance requirements for local home-ported boats — even though the local longliners do not leave American Samoa's waters, they “are required to clear customs, immigration, agriculture and health”.
 
“This is contrary to what is required by law,” they said.  “Longliners... are similar to alias that fish around the island waters and come and go as they please, yet, they're not required to undergo clearances.”
 
Other issues on the agenda raised with Lafaele:
 
•            Trash and bathroom facilities for port users such as fishermen, service technicians, stevedores, etc.
 
•            Concerns of port fees increasing with challenges being faced by the local fishing fleet. Survival of the local fleet is very challenging with increasing numbers of the Chinese fleet that are being subsidized. Assistance is requested for seeking grant assistance to help the local fleet to remain competitive (example — fuel-efficient engines, etc.)
 
•            Request for council members to re-introduce a request by US local longliners to be included in the US Tuna Treaty to allow vessels to access treaty areas around American Samoa.
 
•            Infrastructure: It is important to keep maintenance/ repair infrastructure intact and maintain the ability of vessels/ boat owners to utilize available services for maintenance and repair. Numerous frivolous lawsuits against vessels have led to the uncertainty of utilizing services and technicians readily available in American Samoa.
 
The governor’s executive assistant Iulogologo Joseph Pereira, in response to queries from Samoa News about the 5% excise tax said the Treasurer should be commended ‘for being tenacious in ensuring that revenues accruing to the government are collected.”
 
Iulogologo added, “It is necessary to collect all of the economic data to determine how the government can provide meaningful assistance to the fishing fleet.”
 
He noted that a revelation from the Western Pacific Fisheries Management Council relating to possible availability of federal funds to ease the economic plight of the fishing fleet through the US Department of Commerce “will need to be explored and pursued”.
 
(This federal funding is allowed under provision of the federal  Magnuson-Steven Act. See Thursday, Dec. 19 front page story on the Council’s comments.)
 
However, Iulogologo said the question is how much subsidy should be given to the fishing Fleet to maintain its competitive advantage? Moreover, how long should the requested subsidy remain in place?
 
The governor’s executive assistant commented that the catch numbers cited by the Council for Chinese and Solomon vessels “are staggering and I assume that they are not subjected to the same rules applied to the American based fishing fleet.”
 
According to the Council, the “desperate times” faced by the American Samoa longline fleet are also being felt by longline fleets dependent on albacore across the South Pacific. For example, China’s catch rose from about 2,000 metric tonnage (mt) in 2000 to over 24,000 mt in 2012. Over the same period, the catch of albacore by the Solomon Islands rose from about 200 mt in 2000 to 9,300 mt in 2011.
 
As to what American Samoa should do at this point, Iulogologo said, “What we need to do is to come together to find mutual solutions to mitigate this formidable challenge. Pointing fingers will do nothing to address the problem.”
 
“This problem has long been brewing and while instant solutions are expected, the American Samoa Government currently lacks the financial wherewithal to provide financial subsidies desired by the fishing fleet,” he said.
 
Iulogologo said he is “very confident” the governor and lieutenant governor will “find solutions within their legal purview to assist the fishing fleet, recapture its competitive advantage and allow them to continue operating.”
 
He noted, “It is the same struggle that our canneries… are continuing to face to remain profitable and to remain in American Samoa. The existence of the canneries means a minimum of $100 million of direct and indirect economic benefits to American Samoa.”
 
Samoa News Editor-In-Chief, Rhonda Annesley contributed to this report.



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