Togiola weighs in on tax issue surrounding local fisheries
On behalf of his friends in the local longline fishing industry, former Gov. Togiola T.A. Tulafono has urged ASG Treasurer Dr. Falema’o ‘Phil’ M. Pili to honor the rights of the local fleet by waiving the 5% excise tax on fish caught in American Samoa’s Economic Exclusive Zone.
Togiola’s message was outlined in a Jan. 4 letter following two Samoa News stories late last month quoting Pili saying that 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 exactly where the fish have been caught.
The former governor, who operates a law firm in Malaeimi, says he was writing only as a friend of the local longliner fishing vessels and their owners, and as a concerned citizen, and not as a legal representative of the association.
He pointed out that pursuant to the Tax Exemption Certificates (TEC) awarded to the canneries, all fish delivered to the American Samoa canneries for processing locally is exempt from any tax, fee or charge by the American Samoa Government.
“By that agreement, the fish delivered to the canneries is further exempt from any new taxes ASG may adopt after the TEC was signed,” Togiola explained. “Even if there is a new tax imposed today by ASG, the fish are still exempt from taxation.”
Additionally, the canneries are obligated to notify the boat owners so they are aware the fish are exempt.
As previously reported by Samoa News, based on a legal opinion by the Attorney General that waived the tax on the catch for local longliners, there is also the fact the local longline vessels generally distribute approximately 90% of their catch to fisheries within the territory, while selling about 10% to other local establishments.
It is on this 10% that ASG has been levying the excise tax, a tax which applies to all products imported for commercial use or resale pursuant to local law, according to the analysis of the legal opinion, which notes the 10% cannot be considered imported goods. (See Dec. 30 edition of Samoa News on the legal opinion and analysis)
In his letter, Togiola informed the ASG Treasurer that the fish not delivered to the cannery is also exempted by the statute.
“I submit to you that the entire catch — cannery fish and non cannery fish — of the locally owned, operated and registered fishing boats are LOCAL PRODUCTS and, therefore, not ‘Import For Resale’ that is subjecting it to the imposition of excise tax,” said Togiola.
“Our local fleet are boats owned and operated by local residents who own business licenses to operate their business in American Samoa,” Togiola emphasized. “Fishing is their business and production. It does not matter whether the fish was caught inside or outside of the United States EEZ, as long as it is caught and harvested by the local fishing vessel. It is local production for local sales.”
“Most definitely, however, fish caught and harvested in our own US EEZ are local products and would not be imports as opined by the Attorney General. The catch in our EEZ is a local product whether it is sold to a cannery or a local store or restaurant,” he said. “Again, this local product is exempt from taxation by the statute.”
On the question of whether nor not a Customs clearance should be issued, Togiola said, “I dare say that if a local fishing boat is fishing in our own EEZ, they should not need a Customs clearance.”
“But I am not articulating foregoing such clearance, because I think it’s a wise policy for security and safety reasons and should continue,” he said and noted he is aware of the objection from the boat owners “but I maintain that it is necessary for security and safety purposes.”
“Such clearance is a good monitoring tool, but it can also become very important when a local fishing vessel needs to make an emergency landing in a foreign port,” Togiola said. “Having that clearance will expedite their entry and treatment under international treatises.”
“On behalf of my friends in the industry, therefore, I urge you to reverse your position honor the legal rights of the owners of the local fishing fleet,” he said. “It’s tough enough trying to make ends meet as it is.”
“If they are required to defend their legal rights based on these exemptions from taxation, it just may not be possible to survive the business in this very fragile economy in the fisheries industry,” Togiola concluded.
Meanwhile, the ASG committee appointed by the governor to identify areas to help the local longline fleet was to have transmitted soon their recommendations to Gov. Lolo Matalasi Moliga, according to committee member, Keniseli Lafaele, the Commerce Director.
“All I can say at this time is that we understand the plight faced by our longliners and we are doing our best to assist them in areas we can,” he said in response to an inquiry about their reaction to the boat owners who put up For Sale signs on their fleet last Thursday.
Samoa News Editor-in-Chief Rhonda Annesley and reporter Fili Sagapolutele contributed to this report.