Pago Pago, AMERICAN SAMOA — American Samoa Shipyard Authority employees and its Chief Executive Officer (CEO) Carlos Sanchez, peacefully protested outside the A.P. Lutali Executive Office Building in Utulei yesterday morning.  

ASSA is a semi-autonomous agency of the American Samoa Government.

The demonstration responded to the Department of the Treasury's refusal to release a container of equipment unless an excise tax of nearly $30,000 — equivalent to eight percent of the monetary value of the goods inside the container — is paid.

Treasurer Donald Kruse recently spoke with KVZK TV, outlining the requirement for all government entities to pay excise taxes on goods shipped into the territory. He underscored that this tax obligation is uniformly enforced across all government agencies, authorities, and departments, ensuring that no entity is granted exemption from these requirements.

Specifically, organizations such as the American Samoa Telecommunications Authority (ASTCA), American Samoa Power Authority (ASPA), and the local Hospital are also subject to these excise taxes. The revenue generated from these taxes is vital, the Treasurer pointed out, as it funds a wide range of public services and infrastructure projects that benefit the community, including health services, education, and transportation infrastructure.

An exception to this rule exists through an internal governmental charge, which allows departments, agencies, or authorities to apply for a waiver. This waiver enables them to release their goods immediately while postponing the payment of excise taxes or allowing for future offsets against these taxes.

When it comes to tax exemption certificates, Treasurer Kruse clarified that the authority to consider and approve such requests rests solely with the Board. He emphasized that he, as Treasurer, does not have the power to grant these exemptions, ensuring a clear separation of duties within the governmental framework.

The Shipyard CEO Sanchez did not mince words when addressing the media. He said it is “plain stupid” that the Treasury is taxing another government entity. 

“The Ronald Reagan Marine Railway, which just reopened last year after a lengthy closure, is currently grappling with significant financial challenges.

“We barely meet our operational expenses, yet the government insists that we pay excise taxes, which we simply cannot afford. 

“For the last three administrations, we have received tax exemptions due to the low revenues generated by our services. This longstanding practice acknowledges our unique circumstances as a public agency dedicated to enhancing transportation and promoting regional economic development. 

“Given our financial situation, the decision to impose excise taxes seems unreasonable and counterproductive to our mission.

“As a government agency ourselves, it raises a fundamental question: why should we be subjected to taxation from the same government we serve?

“This situation appears to lack common sense and threatens our ability to operate effectively for the benefit of the community,” said Sanches.

According to Sanchez, the shipyard has undergone a remarkable transformation over the past four years, rising from disrepair to a fully operational facility. This revitalization has been accomplished mainly through local workers' dedication and hard work, who have played a vital role in the shipyard's reconstruction. 

He noted that today, the shipyard has expanded its range of services from its core operations, and now repairs tanks for ASPA, as well as providing crucial support for the region's energy needs. Furthermore, it works collaboratively with the Port Administration to enhance shipping and transport services.