StarKist commends the US Congress for reinstating tax credit for 2017

But notes that it needs to be long term to “incentivize investment”
fili@samoanews.com

StarKist Co. has commended the US Congress for passing federal legislation, which includes a provision reinstating the American Samoa Economic Development Tax Credit (30(A) for the 2017 tax year.

The company’s president and chief executive officer, Andrew Choe, said StarKist is “especially appreciative of the leadership” of Gov. Lolo Matalasi Moliga and Congresswoman Aumua Amata, “for their support on this critical effort.”

“Without this 30(A) credit, it would not be economically viable to continue to manufacture in the American Samoan Territory,” said Choe in a company statement, adding that the cannery — the largest private employer in the territory — employs approximately 2,300 workers “and is a proud member of the American Samoa community since 1963.”

Lolo is “very please and very happy” to learn about the tax extension, saying that this “positive outcome could not have been achieved without working closely and with arms length collaboration” with Starkist, Amata and her colleagues in the US House, US Sen. Orrin Hatch of Utah and his friends in the US Senate, and Utah Gov. Gary Herbert.

“The people of American Samoa are truly blessed to have such friends who continue to champion our needs in the Congress of the United States,” Lolo said yesterday responding to Samoa News inquiries through his office.

The governor is also thankful to US Interior Secretary Ryan Zinke and his staff “for his great support of this measure which certainly gives Starkist some financial relief from the many challenges which it currently faces.”

In a news release, Amata said extending the tax credit “simply makes sense” and this policy supports the long-term presence of jobs that are important to American Samoa's economy and community.

“A one-year extension is another good step in the right direction. A longer-term extension would allow for better planning and stability, so we will continue to make that case,” she said, and noted that the extension is for the 2017 tax year, in time for the current tax preparation season, while a long-term extension would require further legislation.

StarKist reiterated that it’s becoming increasingly difficult for American Samoa to compete with other manufacturing locations where labor costs and other expenses are substantially lower and subsidized.”

“Our competition is doing a bulk of its production in countries like China and Thailand and reap the financial benefits of cheap labor and subsidized costs,” Choe said. “StarKist, on the other hand, is trying to sustain a business on U.S. soil and is being penalized with increased costs and short-term fixes. The 30(A) tax credit helps to level the playing field and enables American Samoa to better compete globally.”

He pointed out that the tuna industry is a globally competitive, largely commoditized business where profit & loss is determined by pennies. 

“American Samoa has historically been an attractive location from which tuna products could be manufactured as a result of a reliable and high quality supply of whole fish directly delivered to the canneries,” he explained. “These main advantages are being eroded, and that is adding additional burden and cost to our operation.”

In light of these challenges, “we applaud Congress’ ongoing attention to strengthen the economic foundation of American Samoa to benefit the territory’s future,” he said and urged Congress “to take steps to make the 30A relief permanent and to more broadly address the economic issues plaguing the territories.”

“Economic relief that must be re-evaluated every year or every other year creates uncertainty and does not do what it can to incentivize investment in these distressed areas,” Choe said.

Amata noted, “In a place the size and population of American Samoa, these jobs that this policy protects have a tremendous economic impact.

"American Samoa's economic and geographic situation is unique among U.S. states and territories. I appreciate the widespread bipartisan support in Congress for this jobs initiative,” the congresswoman concluded.

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