In a brief statement yesterday afternoon, Acting ASG Treasurer Ueligitone P. Tonumaipea has “postponed indefinitely” the effective date of the proposed changes in computing the 5% excise tax it currently levies on all goods for sale or commercial use coming into the Territory.

As previously reported by Samoa News, Chief of Customs Moetului Sipili Fuiava in a Jan. 18 memo to “all concerned” said that effective Feb. 1, 2017, “customs will include freight and insurance costs in calculating excise taxes. Only bulk fuel will be exempted from this edict.”

Many businesses didn’t get a copy of the memo and some have questioned whether this is just another way ASG is seeking to collect more money for its coffer.  (See Samoa News Jan. 20 edition for details.)

Tonumaipea said the effective date in Moetului’s memo was “to ensure adequate time for feedback, to address any concerns” from the general public and business community and to complete any internal action as needed with all appropriate agencies.

As such, the Feb. 1 effective date in Moetului’s Jan. 18 memo announcing the inclusion of additional costs in the computation of the excise tax “is hereby postponed indefinitely,” Tonumaipea said.

“While I believe there should be additional review of the proposed changes to the excise tax computation... we have determined that given the longstanding existing interpretation of the excise tax statute, the ambiguity of how the excise tax statute is written and the immediate feed back from the business community, we have come to the conclusion” to postpone the proposed change, he said, but didn’t reveal some of the feed back from the business community.”

In conclusion, Tonumaipea said, “As always, should you have any additional comments or feedback, we stand ready and are available for your thoughts and concerns.”

Copies of the statement were sent to the governor, lieutenant governor and Moetului.

BACKGROUND

The proposed change to the computation of the 5% excise tax as outlined in the Chief of Custom’s memo or letter would have included the cost of insurance and freight onto the value of goods, thereby increasing the amount of the tax levied. Currently, the value of goods on which the 5% excise tax is levied is without the cost of freight and insurance, i.e. FOB value.

Comments from the business community included, “Customs has creatively rewritten the Code by inserting a semi colon where a period exists. The letter (memo) also cites the wrong Code section.” While another said, “Now there's a perfect example of "taxation without representation. What happened to the January 11 meeting we were supposed to have with the governor and key staff to address these issues?”