Task Force rallies House members to approve tax table bill
ASG Task Force chairman, Attorney General Talauega Eleasalo Ale has asked House members to seriously consider the Administration's bill that updates the local tax table, because if the Fono approves it, taxpayers will benefit.
He said many discussions on the issue were held amongst task force members and they believe many people will benefit - they will get something back from the government - if the bill is passed.
According to Talauega, there has been a lot of mixed reactions regarding the proposed 7% sales tax bill but if the Fono approves the bill to update the tax table, and repeal the 2% wage tax, "then our people will fully understand that the government is not only looking for ways to increase revenues, but also ways to help the community."
Members of the ASG task force appeared before the House Budget and Appropriations Committee yesterday morning, to testify on the Senate version of the Administration’s bill to change the tax tables for American Samoa.
According to the task force, updating the American Samoa individual income tax table to mirror the federal code will mean taxpayers would be giving less money to the government.
ASG Treasurer Uelinitone Tonumaipea said American Samoa has used the 2000 tax table, standard deductions and dependent exemptions for calculating personal income, since 2001.
But an Administration bill now before the Fono, updates the local tax table starting in tax year 2018, by adopting the US Internal Revenue Service tax table for standard deductions and dependent exemptions for the year 2004.
House Speaker Savali Talavou Ale voiced his concerns, saying the government will lose more revenue if they pass the bill. He said taxpayers with a total income of $30,000 a year or less, will only pay the minimum tax of 4% and the only people who will benefit from the bill are those with a total income of $30,000 or more per year. Savali said he doesn't want the government to lose more revenue, because it will affect operations in the future.
Tonumaipe’a acknowledged Savali's concerns and said the task force has received a lot of feedback from members of the public, the business community, and also the Fono about the revenue measures being presented by the government. He wanted everyone to know that while some revenue measures will generate additional money for the government, others will benefit the community.
Savali asked the task force, if it's true that only those with a total income of $30,000 a year and more will benefit from the bill, and Talauega responded, yes.
“This bill will benefit those with a total income of $30,000 or more a year, but it will also benefit those with a total income of $30,000 or less a year, because they will only pay the minimum tax of 4% to the government,” Talauega said, adding that 70% of tax payers in the territory are paying the minimum 4% tax to the government.
Committee chairman, Rep. Vailiuama Steve Leasiolagi reminded the task force about a motion from Rep. Vui Florence Saulo during a hearing last week, to move the effective date of the bill from 2018 to 2017.
Vailiuama wanted to know if there would be any burden to the government if the committee moves to accept the motion from Rep. Vui.
Tonumaipe’a responded that it is up to the committee to make any amendments they feel would be best for the community.
During last week’s hearing on the house version of the bill, Rep. Vui asked why taxpayers should have to wait a whole year to enjoy the benefits of the changes, instead of implementing if for the 2017 calendar year.
The Treasurer said this was because the 2017 calendar year is halfway over.
According to the bill, by tax year 2022, America Samoa’s income tax table will mirror the 2022 IRS tax table, and the tax table for each subsequent year - after 2022 - will be updated annually with the IRS tax table.