Tautai: Treasurer’s fish excise tax decision ridiculous
A member of the Tautai o Samoa Fishing and Longline Association, who is a boat owner and also the wife of a longline boat owner, has described the decision by ASG Treasurer Dr. Falema’o ‘Phil’ Pili not to waive at this time the 5% excise tax on fish caught by the local longline fishing fleet in the territory’s exclusive economic zone (EEZ), as “ridiculous and outrageous.”
Despite a recently issued legal opinion by the Attorney General’s Office waiving the excise tax, Falema’o told Samoa News last week he has no plans to waive the 5% excise tax on fish at this time, adding that one of the difficulties in waiving the tax is the problem with determining which catches are caught in the territory’s EEZ.
“This is absolutely ridiculous and outrageous,” said Christina Lutu-Sanchez, who along with her husband Carlos Sanchez owns six longliner boats. “It shows the lack of knowledge that the Treasurer has on these issues,” she said.
“It is very unfortunate, as this is an issue that has been overdue and long standing… The excuse given by the treasurer is so petty and trivial and these have been discussed before,” she said in a statement to Samoa News over the weekend.
And she reiterated the issues discussed before:
• There is one list of boats authorized to fish in American Samoa waters. You don't have to guess which boat is which, because the National Marines Fishery Service (NMFS) publishes the list of permit holders to longline in American Samoa — US EEZ.
• It is very easy to know where our boats fish. All US longliners operating here have VMS (vessel monitoring systems), and the federal government (through NMFS) knows where we are at 24 hours a day. The local government can easily have access to this information, as they collaborate on enforcement and collecting of fishery data.
• We are also required to keep logs that have details of where the fish was caught, what time of day, how much fish, the species caught, etc. Again, the local government has access to this information as they collaborate with NMFS for the collection of this data.
• We have NMFS observers on the boats many times as required by law.
• If any of the boats cross the borders to other countries, they are not only subjected to possible fines by the U.S Coast Guard, by the neighboring countries and we would lose the catch for the entire trip (by law) — not just that one set. They won’t let you unload the fish until the other country representative shows up to claim that fish. This blame does not go to the captain — it goes to the boat owner, and the captain would be expelled from the fishing boats.
“With all of these risks, do you think anyone would be stupid enough to try and claim a 5% waiver on less than 2% of the catch from a trip?” Lutu-Sanchez told Samoa News.
“Aside from answering the question of tracking where the boats are or where the fish are caught, the fact still remains, that if the fish are harvested in American Samoa, it is DOMESTIC product and not imported, which is what that 5% tax is on — duty on imported goods,” she argued.
At the same time, she points to the local alias (smaller fishing boats) that are complaining about all of the bottom fish imported from Samoa that is not being taxed and they're unable to sell their fish in the local market.
“What about all of the truck loads of miscellaneous fish coming out of the port caught by purse seiners? None of the purse seiners fish in American Samoa waters,” Lutu-Sanchez says.
She further questioned, “What about the truck loads of miscellaneous fish unloaded by the foreign longliners like Taiwanese/ Korean longliners and sold to local stores/ restaurants for resale? None of those longliners fish in American Samoa.”
“As a matter of fact, the [federally funded] school lunch program at one time was buying fish delivered by foreign boats — untaxed,” she noted. “We are not sure if they're still doing this now, but the fish contractor was getting fish from foreign boats and not US as required by law.”
“Since these foreign boat are not from here, they don't have to comply with the laws or are conscious about it as they go and don't come back for a very long time, and they cannot be penalized as no one is watching them,” she said. “These foreign boats are not required to comply to US laws or have NMFS observers like the US fleet.”
Lutu-Sanchez said, “On the same token, the [local] alias are not taxed on fish caught in American Samoa waters — so this is a very discriminatory situation,” she said.
LEGAL OPINION ON 5% EXCISE TAX
The legal opinion by the AG’s Office is dated Nov. 18, 2013 and signed by Deputy Attorney General- Civil Division, Eleasalo V. Ale, on behalf of Attorney General Afoa L. Su’esu’e Lutu. The opinion followed a request by Treasury regarding concerns raised by Tautai o Samoa.
“It is our opinion that fish caught within American Samoa’s EEZ by local fishing boats should not be subject to the 5% excise tax because under federal and local laws, such items cannot be consider an ‘import’ — (as defined by federal law regarding “import” that specifically excludes “fish caught in the exclusive economic zone”),” the opinion states.
It also explained that local excise tax law applies to imported goods only. Furthermore, goods that are grown, harvested or created in American Samoan by local residents are not subject to excise tax.
Therefore, “Fish harvested within American Samoa’s EEZ by local fishing boats should not be treated differently,” it says.
An analysis of the legal opinion, which was also provided to the Treasurer with copies to the Governor’s Legal Counsel, Steven Watson, explained that Tautai’s vessels generally distribute approximately 90% of its catch to fisheries within the territory, while the boats sell the 10% — which the fisheries did not accept — to other local establishments.
For the 10%, the ASG has been levying the 5% excise tax that applies to all products imported for commercial use or resale pursuant to local law, the analysis said and notes that the 10% cannot be considered imported goods.
The analysis of the opinion does suggest, how Customs and Port Administration can track where the fish are caught, and that is through the observers traveling onboard the commercial fishing vessels. (This supports one of the issues raised by Lutu-Sanchez on how ASG can track fish caught in our EEZ.)
“The information and data that observers track down should contain the exact location of the fish each vessel catches and bring into the territory,” it says. “Perhaps, the data from observers can assist in determining whether local vessels’ catch came from international waters or the EEZ.”
The opinion further pointed out that fish caught in international waters should be taxed 5% pursuant to American Samoa law.
(Samoa News should point out that the opinion does not say who is catching fish ‘in international waters’ — only that is should be taxed, according to local law.)
In conclusion, “the American Samoa Customs [Division] should not be taxing fish brought in from American Samoa’s EEZ by local fishing vessels.”
(See separate story elsewhere in today’s edition about the support the longliner fleet has received from former Gov. Togiola T.A. Tulafono.)
Samoa News Editor-In-Chief Rhonda Annesley and reporter Fili Sagapolutele contributed to this report.
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