Tax revenue collection projected downward for FY 2015
“Although overall tax collection has been strong this year — in part due to the restoration of lost tax revenues connected with ASPA being a fuel supplier, and an increase in tax audit activities — tax revenue collection is projected to be 5% lower next year versus the previous fiscal year,” said Governor Lolo Matalasi Moliga. He said this is mostly due to the 9% reduction in individual income taxes due to the large number of non-filer individuals.
Further, according to the governor’s FY2015 budget cover letter to the Fono sent last week, excise tax collections are also expected to be 8% lower than FY2014.
This is partially due to the inclusion of $1.5 million under ‘Transfers In’ as part of legislation to earmark one cent of the five cents collected for school repairs, that wasn’t separately identified in the previous year.
Of interest: The governor points out that overall, the Department of Treasury has made it an integral part of its operating mantra to evenly, fairly, and aggressively enforce all tax laws to ensure that all taxpayers have filed their taxes. He says the Treasury has identified a trend over the last five years based on the “Flat Tax Study” conducted in 2012, which revealed that 27% of businesses have not filed taxes.
LICENSES AND PERMITS
Lolo said revenue collections for licenses and permits are expected to be $100,000, or 9% higher than the year before, reflecting the expansion in the number of new businesses being established, coupled with the rise in the number of permits obtained to support the implementation of new projects initiated by the government.
The administration expects that the actual revenue collections will exceed the projected increase due to numerous major economic activities implemented by the private and the public sector.
Lolo points to policies set by government encouraging participation by all construction companies in roads and facilities construction projects, which triggers equal demand for new licenses and permits.
He also says the implementation of the one-day business license policy has already shown an increase in the number of new business licenses issued. Of note, an increase of the one-day business license fee is mentioned in the cover letter, which it says would allow for an anticipated increase in revenue. However, it is not noted as occurring for sure.
FEES AND FINES
Lolo said although the projected amount of $552,800 reflects a 15% decrease in Fees and Fines, it is hoped that the collections will substantially increase due to the proposed Amnesty Program intended to be implemented before the end of the year. While a reduction is being forecasted, there is confidence that total collections may very well attain the fiscal year 2014 level attributed primarily to the aggressiveness of the Immigration Staff and the Immigration Board to enforce all immigration laws.
CHARGE FOR SERVICES REVENUE
Overall, charge for services revenue is forecasted to be $781,200 or 12% lower — in part due to marginal port activities and fishery regulations restricting the frequenting of fishing vessels within our waters and beyond. Activities for cargo vessels are expected to be marginally consistent.
Better management of government leases, more efficient collection methods, and aggressive investments by government will expand its income base. New initiatives are being implemented calling for the review of all port and airport fees, along with the leases located within the Department of Port and Airport Administration compound.
The existing port fees were established over thirty years ago, and the current lease rates are deemed to be grossly undervalued. In particular, new leases located within the airport compound will certainly increase revenue collections, the governor says.
Current discussions between FAA and the Government of American Samoa relative to the land originally placed under the administrative purview of the Airport could improve port/airport revenue collections before the end of fiscal year 2015.
A slight increase being forecasted for miscellaneous revenue is primarily attributed to the increase in Settlement and Judgments proceeds of $300,000. It is projected however that at least an $84,000 increase is estimated for other revenue. This expectation stems from consistent action of the Department of Treasury to better manage ASG’s cash assets.