Attorney General Talauega Eleasalo Ale says there is no special rate applicable to only a few, rather the 5% excise tax rate is for all heavy construction equipment intended for exclusive use on construction. This came in response to Samoa News queries following concerns raised by Customs Agents regarding the release of an excavator belonging to a construction company, which was reduced from 25% to 5% tax.

This occurred last month and when Samoa News asked government Treasurer Tonumaipe’a Ueligatone for his comments on the new rule, he explained that there was a legal opinion rendered by the AG, which called for the Treasurer to decrease the taxes on “heavy construction equipment intended for exclusive use on construction.”

For many years construction companies have paid 25% on excise taxes for all imported commercial vehicles, including heavy equipment, however “all of a sudden the AG says to change it” and now it’s been decreased, said one senior Customs officer.

Samoa News spoke to Talauega who explained that there was no legal opinion issued on this matter. In an email to Samoa News last Friday. The AG explained that “the excise tax rate for all heavy construction equipment intended for exclusive use on construction sites is 5%. This rate applies across the board to all importers of such equipment. It is not a special rate applicable to only a few.”

According to the Custom agent, under ASCA 10 it follows: EXCISE TAX ON IMPORTS 11.1002 (3) ON VEHICLES AS FOLLOWS (3) motor vehicles: (A) twenty-five percent of the basis of motor bicycles, automobiles, trucks, and vans, to be used for commercial purposes; (B) notwithstanding the provisions of paragraph (A), the tax levied on motor bicycles automobiles, trucks, and vans, imported into American Samoa for personal or family use shall be 10 percent of the basis thereof.

If a motor bicycle, automobile, truck or van, is converted to commercial use after being imported for personal or family use, it shall then be subject to the balance of the applicable tax imposed under paragraph (A). (C) No tax exemption, including that provided by Title 11, Chapter 16, shall be granted for any motor vehicle. All other motor vehicles not taxed under this subsection shall be subjected to the tax under 11.1002(a)(7).

Samoa News  should point out that the 5% excise rate the AG is saying must be used for commercial vehicles and heavy equipment across the board came from the AG — it’s a reduction in the 25% rate — and there is no statute or law stating this.

The Custom Officer told Samoa News that “it’s not fair to all the construction companies who have paid 25% in the past and then a new AG is appointed and he decreases the excise tax. What will happen when another AG comes on board, what then?”

The agent further told Samoa News they were shocked when the Chief of Customs decreased the excise rates on the heavy equipment without a proper explanation to the agents as to why.

When Samoa News reached out to the Acting Chief of Customs, Moetulu’i Fuiava, he declined to comment on the matter and referred everything to the Treasurer.