Treasury plans town hall meets on Gross Receipt Tax
ASG Treasury Department plans to hold several town hall meetings on the Gross Receipt Tax proposal, says Treasurer Dr. Falema’o ‘Phil’ M. Pili, who also plans to give a presentation later this year to the Fono leadership.
The GRT revenue would greatly help the local government when there are problems in Congress dealing with federal funds, Pili stated.
The GRT proposal calls for a five percent tax on all gross receipts for all businesses, including non profit organizations, except religious groups. It will result in the elimination of the territory’s Corporate Tax over a three year period, according to the Treasurer.
Asked as to the status of this proposal, the Treasurer told Samoa News, “we are tweaking a few things into our GRT presentation — taking into consideration a few recommendations from the general public and the private sector so far.”
They will then hold several town hall meetings before it's taken to the Fono leadership, he said, adding that Gov. Lolo Matalasi Moliga will have to give his blessings on this before the Fono presentation.
“The governor is on board with this. He wants to ensure that all the details are worked out, running through the business community and the general public. And that is the process we are taking now,” Pili said via email over the weekend from the mainland where he is attending meetings for ASG.
He said Treasury is looking at the second week of November to start public meetings and “we are hoping to meet with the Fono leadership before the next session in January.”
Pili gave the GRT proposal presentation last month during a meeting of the Chamber of Commerce and the private sector voiced some concerns and opposition of the proposal.
“I thought we had a great dialogue with the business community. It was a great moment of exchanging ideas moving forward,” he said. “I received many supportive emails at the results of this open forum.”
However, Pili thought Chamber chairman David Robinson “was very unfair in his position of the GRT” and being chairman of the business group “should have allowed the membership to express themselves when the time was allotted to them, but instead he tried to preempt the entire GRT presentation before he allowed the general membership to express themselves.”
“I thought that was unusual for the Chairman and that kind of behavior was unbecoming of a leader — after all, he was the one who invited me to make the presentation,” said Pili. “He had a preconceived negative opinion of the presentation.”
Asked for comments on Pili’s statement, Robinson told Samoa News yesterday that he does not want to get into a “verbal battle with the Treasurer as it would not be helpful.”
Robinson said he met with the Treasurer two days before his presentation to the Chamber and advised Pili that “reaction to the GRT from the private sector was negative” and at the presentation Chamber meeting, “all I said was ‘we do not like it’.”
“As far as I am aware this is still the private sector position,” said Robinson.
Meanwhile, Pili said there were much “positive input” from the Chamber meeting; “subsequently, I have received numerous positive suggestions in which we have been reviewing them and incorporating some of these ideas to make this GRT a viable solution to our new Tax Revenues Reform movement that would benefit our Territory.”
Asked if the GRT would have helped ASG financial resources during the 14-day federal shutdown earlier this month, Pili replied, “absolutely — what we just experienced with the federal shutdown was inevitable; however, I am happy it is over with at this juncture of the politics on Capitol Hill.”
“Unfortunately, in my opinion, it is far from being completely over. There continue to be differences with the politicians with regards to the national financial outlook of the country — both short and long term,” he said.
“As the result, if this continues it could have a precarious outlook on our local federally funded programs,” said Pili. “We need to continue to prep ourselves for these financial eventualities — continue to be prudent with our spending, continue to increase collection of local revenues, introduce new revenue measures and be current with our federal expenditure reimbursements.”
“Our financial resources are very limited. This is the reason we are aggressively pushing for the GRT. It would generate enormous amounts of revenues over time, to help build up the needed reserves to lessen dependency on the federal dollars,” he said. “It was interesting that during this shutdown, we received numerous calls from vendors asking why can’t we use our cash reserves to pay out payments, and to absorb the workforce payroll funded by the federal dollars.”
“Unfortunately, we do not have adequate reserves to cover this type of economic slow down,” the Treasurer said.
Pili also pointed out that over the past years, ASG has been operating on the principle of "hand to mouth" living — without regard to any form of reserves and investments for the future.
“We can no longer operate under this principle. We have a volatile economic base, and the Governor’s mandate is to find ways to strengthen these mishaps of the past and build a stronger and stable economic base for the Territory not only for now, but more importantly for future generations,” he said.