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Fono will take a hard look at projected tax revenue, ASPA budget

FY 2013 budget hearing gets underway today
fili@samoanews.com

The joint Legislature budget hearings on the American Samoa Government’s close to $500 million budget for fiscal year 2013 gets underway this morning at the Senate chambers.

According to the Fono schedule, regular sessions of both Chambers will convene at 8:30 a.m. instead of the usual time of 10 a.m. The budget hearings are set for eight working days and hearings start at 9:30 a.m thru to the afternoon.

Today’s budget hearing witnesses are ASG Treasurer Magalei Logovi’i and Budget Office and Planning director Malemo Tausaga and both men are expected to be questioned on how ASG came up with revenue forecast for FY 2013, especially in local tax collections that the governor says will increase in the new fiscal year, which begins Oct. 1, 2013.

Gov. Togiola Tulafono cited in his letter to the Fono that local tax revenue increases are the result of, among other things, increase in tax collection and a hike in the canneries’ workforce next year.

However, during last week’s Senate Budget and Appropriations Committee hearings in preparation for the annual budget review, Samoa Tuna Processors Inc., official Alfonso Pete Galeai testified that it’s not until the middle of next year that many of the company’s ongoing projects are expected to be completed.

Galeai also said that the company is looking at a workforce of between 1,200 and 1,500 but it all depends on the completion of construction projects and market demand. He said the current workforce is only 45.

Then last Thursday, Tax Office manager Melvin Joseph testified that based on his own personal opinion without any analysis, he believes that projected tax revenues collections for corporate, individual income and military cover over taxes are too high.

Senate budget committee chairman Sen. Lemanu Peleti Mauga briefed senators during the Senate session last Thursday on the committee hearings, saying that any government revenue to be collected from Samoa Tuna Processors will not be realized until FY 2014 and the Tax Office believes the projections for FY 2013 are too high.

Lemanu suggested to his colleagues to keep this information in mind during the Fono joint budget hearings, which are scheduled to be completed by Sept. 13. The Fono’s budget will be the last ASG entity to be reviewed by lawmakers.

(Samoa News should point out that other tax collection revenue for ASG comes from excise taxes — general excise tax and soda tax — which is collected by the Customs Division of the Treasury Department)

Also during the Senate session, Senate President Gaoteote Tofau Palaie called on his colleagues to proceed with its thorough review of the American Samoa Power Authority’s fiscal year 2013 budget despite any claims by ASPA management that its board has the final approval for the annual budget.

Gaoteote told senators that the Fono’s interpretation of the law is that ASPA is a government entity and subject to Fono approval of its budget. He also called on the Budget committee and senators not to give any chance to ASPA to believe or even think the Fono does not have the authority to approve their budget.

He urged senators to maintain their duties and carryout a thorough review of the ASPA budget as well as other entities of ASG.

According to the budget document, ASPA’s FY 2013 budget totals $115.45 million, with ASPA’s budget hearing set for Sept. 12.

ASPA management has told the Fono in past hearings that it’s the ASPA board of directors who gives the final approval of the authority’s annual budget, but the Fono maintains it has oversight authority in accordance with local law because ASPA is a government entity. (There has been talk of taking the issue to the court, however Samoa News understands no action has been taken as of yet.)

Because of the budget hearings, Sen. Lualemaga Faoa says the Senate Investigative Committee’s work will be suspended during that time, and will resume once the Fono confirms the budget.



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