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Samoa considers taxing salaries of church ministers — and the Head of State

Samoa’s Prime Minister, Tuilaepa Sailele Malielegaoi  [SN file photo]
joyetter@samoanews.com

Apia, SAMOA — Samoa’s Prime Minister, Tuilaepa Sailele Malielegaoi has dismissed comments by the public that the taxing of Church Ministers is ‘double taxing’ on the working population of Samoa. His comments on the issue were aired on his radio program with SamoaFM last week, following the two-day public consultation on the move by the Samoa Government to tax the Church Ministers and the Head of State.

Tuilaepa said ‘double taxing’ is a mindset of people who don’t want to pay taxes. “If you pay taxes two, three or four times, what is so bad about that? However for the Church Ministers this is how they make money, it’s the ‘alofa/ peleti’ money collected from church members.”

According to Tuilaepa, it does not matter where or how the Church Minister gets his money, the fact of the matter is that he gets a salary as well and that’s where the law is directed, that all salaries must be taxed. “The taxes will be based on how much you (Church Ministers) make.”

The PM said he’s paying close to 50K annually by the time he gets his check, taxes have already been deducted and that’s ‘pay as you earn’ and there should be a system in place for the Churches. The Prime Minister gave an example that if the church collects $1,000, the Church Officers should deduct the tax and then give the salary with a pay stub indicating how much was deducted for taxes. “It’s an easy process, but it appears as if it’s a difficult task, because it’s something new.”

Tuilaepa said he doesn’t object to taxing Church Ministers, as he’s a taxpayer himself — “for a very long time.”

Regarding the proposal to tax the Head of State, Tuilaepa said the Minister and Ministry of Revenue initiated this and thought it’s time to consider this avenue, after research discovered that Heads of State in other countries are paying taxes — aside from Fiji and Tonga. “This is your government and this is your share, to pay the government taxes, the government that you have so much pride in. How can you tell the World you run this country yet you don't pay taxes, something is not right here.”

Tuilaepa said the Cabinet has yet to decide on this matter, as the Ministry is still getting feedback from the public and the churches and once they are done, they will make recommendations and submit a report for consideration by the Cabinet.

PUBLIC CONSULTATION

On the first day of the public consultation, Minister of Revenue Tialavea Leniu Hunt noted the importance of the Ministry of Revenue in the government and their task is to find ways to bring in more revenue.

He said that the working population is all paying taxes, as well as businesses, but the church ministers and the Head of State are not.

In response to questions from the audience, which were mostly journalists, he stated that they are looking at collecting more than WST $4million from the Church Ministers if the proposal is accepted by the Cabinet.

He explained that there are different levels of taxation; those who are earning up to $11,999 don't pay taxes while those making $12,000 to $15,000 pay 10%; $15,001 and $20,000 pay 20% and those making more pay 27% for taxes.

According to Tialavea, this proposal is not new, as it was also discussed back in the 1970s and although there was no data on the public views, it’s been confirmed that there were meetings held on this matter. He said that main concern of the Ministry is to be fair to every salary earner who pays taxes.

SAMOA

According to the Samoa Observer, the Chairman of the Samoa National Council of Churches, Deacon Kasiano Le’aupepe, has cautioned the government over its plan to tax the offerings received by members of the clergy.

“It is something they have to consider very carefully,” Leaupepe told the Samoa Observer. “It’s a sensitive matter because it is not the same for all the churches in Samoa.”

For that reason, Leaupepe said the National Council of Churches does not have an official opinion on the plan by the Ministry of Revenue.

“We’ve told the Ministry that the decision will not come from the Samoa National Council of Churches. This is because the Council is not the one to decide on this matter. 

“We will leave it to leaders of each Church in Samoa to come up with their own ideas in relation to this and then present it to the Ministry for their report to Parliament.” 

Leaupepe said his only wish is that the review is fair and that everyone is given an opportunity to present their views.

AMERICAN SAMOA

In 2015, the local Department of Treasury was looking at taxing church minister’s salaries or “alofas.” According to ASG Tax Office Manager, Richard Jimmerson church ministers are considered “self employed” and they need to pay their dues and taxes to the American Samoa Government.  

Responding to Samoa News queries, Jimmerson said, “The envelopes ministers get for performing services (prayers/sermons) are taxable.” He pointed out “many don't file taxes or pay self employment tax, which means they don't support LBJ or put away Social Security money for retirement, and rely on large monetary gifts when they retire.”

According to the Tax Office Manager, under Internal Revenue Service, Topic 417 — Earnings for Clergy, it says, “A licensed, commissioned or ordained minister is generally the common law employee of the church, denomination, sect or organization that employs him or her to provide ministerial services.”

He said, “If you are a minister performing ministerial services, all of your earnings, including wages, offerings and fees you receive for performing marriages, baptisms, funerals, etc., are subject to income tax, whether you earn the amount as an employee or self-employed person.

“However, how you treat expenses related to those earnings differs if you earn the income as an employee or as a self-employed person, Jimmerson noted.

At the time, Samoa News reached out to the Treasurer, Ueligatone Tonumaipe’a, who confirmed that this is something the tax office has been working on for sometime.

However, there are no further comments from the Treasury or Tax Department about this issue since this story was first published in January 2015