FONO PASSES ROOM TAX
Sen. Magalei Logovi’i has called the Lolo Administration’s proposed 5% hotel room tax, which also covers motels and other similar accommodations, as “not right and unfair” and this is the reason he voted against the House version of the bill.
In the vote of 10-1, the Senate approved on Thursday in final reading the House version of the room tax, or "occupancy" tax, which was approved the week before by the House. The measure now goes back to the House for enrollment in Fono records before it’s sent to the governor for his signature.
The bill becomes effective 60 days after the end of the session in which it was passed. The current session ends on Tuesday.
Asked Thursday afternoon why he voted against the bill, Magalei said, “I don’t feel it’s the right thing" to do to the hotels and motels. He recalled testimony by Pago Airport Inn official Poe Mageo, who told senators two weeks ago that their clientele are mostly Samoans, who live off island and come here to visit family, but who decide to stay at the Airport Inn because it’s air-conditioned.
“So it's Samoans who will end up paying this tax,” he had told the Fono.
Magalei also recalled testimony by officials of Sadie’s by the Sea and Tradewinds Hotels of their concerns over the impact of this measure, and the fact that local residents do stay at their hotels.
(Sadie’s by the Sea owner Tom Drabble confirmed to senators that his hotel is very busy over the weekend, with local residents occupying rooms.)
“To me it's an unfair tax. We need to explore other avenues to raise revenue such as a sales tax,” Magalei told Samoa News. “Here we are — pushing for tourism development— but this tax will just kill that industry. This tax is just not right.”
There were also objections from officials of Tradewinds Hotels and Sadie’s by the Sea over the bill, arguing that it's an unfair tax because it targets only one segment of the private sector. Drabble recommended a sales tax, while Tradewinds recommended that the government first conduct a comprehensive study.
An off island tourism consultant told Samoa News last week that the room tax as well as the proposed “so-called $20 clearance fee” is going to “kill any hope of American Samoa moving its tourism industry development forward.”
“First you need to develop the industry. Once that’s done, you can impose fees and charges. In other words, don’t put the cart-before-the- horse,” according to the consultant, who asked not be identified because of the consultant’s business dealings, which include American Samoa.
ASG Treasurer Uelinitone Tonumaipea told lawmakers that 75% of the room tax would go to the Department of Port Administration for the Airport Division, whose budget comes in at $1.5 million in the red each year, and the general fund ends up covering Port's excess spending. Additionally, 25% of the room tax revenue would remain in the general fund.
(See Samoa News editions of Mar. 26, 27, and 28 for more details)
ANOTHER REVENUE BILL INTRODUCED — INSPECTION FEES AT PORT
If approved and signed into law, the general inspection fee at any port of entry for containers by Customs Officers will be $40 and the attendance of any Customs agent will be increased to $60 instead of $30 per day, according to a proposed bill sponsored by the new faipule from Aitulagi Leasina — Atalina Asifoa. It was introduced Thursday morning.
The inspection fees were an issue that came up last month when Samoa News reported that Chief of Customs Moetulu’i Sipili Fuiava had sent a memo stating that all the containers with loose cargo that are unloaded and inspected at the Customs warehouse must charge the inspection fee of $60 to shipping companies when clearing the container on a master release.
However this decision was rescinded and the Chief of Customs stated that it was due to an “interpretation issue” that he later corrected.
The proposed measure states the bill will create a general inspection fee at any port of entry in the territory for containers by the Customs Officers and earmarks an amount from the fee to enhance and upgrade the operations of the Customs Office.
The bill proposes “a general inspection of any container, regardless of size, at Port of entry, $40.” The proposed bill also increases the fee for the attending Customs agent from $30 to $60; the attendance of a Customs officer after-hours will go from and additional $15 to $20; granting clearance to commercial vessels per entry and per departure is amended from $6 to $10.
The proposed measure also moves for $20 from each fee paid to be placed in an account created by the Treasurer for operations and upgrades to the Customs Office under the Treasury.
As Samoa News reported in early March, the move by Customs caused anger in the business community, as the memos raised the cost of doing business in the Territory by changing the way the Customs Inspection fees are to be charged to businesses, and in the case of loose cargo, charging an inspection fee to shipping companies — and this is a charge these companies said would be passed on to their customers.