Highest revenue collections yet by Customs in FY 2019, says Lolo
Pago Pago, AMERICAN SAMOA — Since the Lolo-Lemanu Administration took over in January 2013, the Treasury Department recorded the highest revenue collections of more than $35 million in FY 2019 by its Customs Division which — for the first time — has a new Compensation Policy implemented last October, says Gov. Lolo Matalasi Moliga.
In his 232-page State of the Territory Comprehensive Report to the Fono and the U.S. Interior Department, Lolo explained that from the onset of the new administration 7 years ago, improving local revenue collections was a “high priority” in order to “adequately address” the wide range of challenges faced by the Lolo-Lemanu Administration, which inherited a $44 million deficit.
Lolo noted that nearly 70% of all local revenues is collected by the Tax Office and Customs Division. And Customs’ annual revenue collections has had positive year-over-year growth in 5 out of 6 consecutive years.
Data included in the report shows FY 2013 total revenue collections of $23.65 million; followed by $26.48 million in FY 2014 - an increase of 11.9%. In FY 2015, collections dropped by 4% to $25.39 million.
Revenues went up to 11.8% in FY 2016 with a total of $28.40 million; FY 2017 with $29.37 million (a 3% hike); FY 2018 with $33.48 million (13.9% increase); and FY 2019 — which closed Sept. 30, 2019 — at $35.91 million (a 7.2% hike).
Customs excise tax analysis in the report shows that the top three revenue collections for Customs excise tax for FY 2019 are: $12.09 million in tobacco taxes; $11.45 million collected from the Miscellaneous excise tax — which changed from 5% to 8%; and $2.79 million in gasoline tax.
Lolo said the positive revenue collections is a direct result of improved operational efficiencies, investment into new equipment and training for personnel, significant improvement in enforcement of existing Customs statues, and improved accountability and performance by Customs agents and officers.
Additionally, despite circumstances beyond Customs’ control, i.e. the longshoremen’s strike in FY 2016 on the US west coast, the cigarette shortage in FYs 2017 and 2019, and a sleuth of cancelled vessel voyages due to ship repairs — Customs “posted positive total revenue growth for four consecutive years.”
INVESTMENT IN PERSONNEL
Lolo explained that during the past 3 years, Customs has seen over 30% turnover in personnel “due to attrition, retirement and incarceration.” (He didn’t elaborate on the incarceration issue).
The large turnover created an opportunity for Customs agents and officers to demonstrate their individual proficiencies and job skills, according to Lolo, who said steady revenue collection results supported efforts to make additional “long overdue changes” to benefit Customs operations, service levels, and employee experience.
Last October, the administration approved “for the first time ever” an official Customs Division Compensation Policy which the governor said, “addressed long term deficiencies in the compensation and promotion of its officers and agents.”
The new compensation policy “increases every position level base salary and includes a mechanism to account for years of service to ensure pay was commensurate with years of service and the position description.” It also “emphasizes merit-based and performance when evaluating promotion opportunities,” said Lolo, who claimed that the new compensation policy “was widely well received by the career officers and agents.”
The governor noted improvements in equipment inspection technology for Customs, as well as an update on facility repairs. For example, $6 million from the American Samoa Economic Development Authority’s 2015 bond was used to purchase x-ray scanning equipment and provide an operator training program for personnel.
Data in the report shows that scanner fees — implemented in FY2017 under local law — collected more than $500K in the first year and increased to more than $1 million each in FYs 2018 and 2019. The governor said ASEDA also provided funding for the construction of the 6,000 square-foot Customs Division Warehouse at the Pago Pago International Airport, and the project was on the drawing board for nearly 20 years but now will be completed at the end of next month.
Furthermore, the Administration invested over $300,000 for renovations of the main Customs Office at the Port of Pago Pago. This project was completed in early 2017. Additional renovation is to be carried out early this year — the Port warehouse to house the Inspection Unit and K9 unit — is set to be completed later this year.
In 2018, Customs rejoined the Oceania Customs Organization (OCO) for the first time in nearly 8 years. Lolo said Customs’ re-engagement with OCO has provided valuable networking and access to training opportunities that would otherwise not be available to local personnel. Furthermore, OCO provides regional information sharing for relevant issues that “we all share in common and a mechanism to communicate efficiently and effectively.”
With the support and commitment from the Administration, Lolo said Customs has “made significant improvements in its overall operation and as a result has seen its highest total revenue collections and illegal drug seizures for the past 4 consecutive years.”
He notes that protecting territorial borders — which is one of Customs’ core responsibilities — “only becomes more challenging as illegal drug smugglers continue to use more and more sophisticated methods of concealment.”
Additionally, “detecting unethical businessowners actively engaged in ways to avoid paying their lawfully due excise tax will... be an ongoing challenge.”
“We believe, that the improvement and changes instituted by the Administration will provide the Customs Division the tools, resources, and support to aggressively combat these activities,” Lolo concluded.