Rather than come up with new revenue measures, the government should do a better job of enforcing existing ones.
That was the message Senator Soliai Tuipine gave Treasurer Ueligitone Tonumaipe’a yesterday.
Soliai said arrears of tenants at the Industrial park would net a sizeable sum if the government did a better job at collecting.
He also asked if the government is monitoring money being remitted off island from Asian owned businesses such as sewing shops because this is money that should be taxed.
The Tax Office Assistant Manager Vaaimamao Poufa said money transfer businesses are required to report any remittance over $5,000 to the government and they would investigate the source of the fund for tax purposes.
The two finance men were testifying on an administration bill which lowers the corporate tax for businesses earning more than $650,000 a year from 44% to 34 %, remove language in the business licensing law which makes an exception for paying taxes as a requirement to obtaining a business license, and puts local taxpayers that contribute to retirement plans at the same tax rate as that set by the Internal Revenue Code.
Treasurer Tonumaipea explained that so many businesses are not paying taxes and the removal of the exception for payment of taxes as a requirement to renew or obtain a business license is intended to get them to pay up.
He said the businesses will still be allowed to operate their businesses but they must make an agreement with Treasury for payment of taxes and abide by it.
Senator Uti , who retired after many years in the business licensing section of the Department of Commerce, said the bill as written does not have any reference to payment agreements.
Tonumaipe’a inisted this was included in the bill and referred to pages of the legislation which had it, but after scanning the bill for a few minutes, he agreed that this language was missing.
For the reduction of the corporate tax rate, Tonumaipea said ASG would lose $277,000 from this move but he said the investment from new businesses which would create jobs and bring other economic benefits would be much greater.
Senators approved the administration bill in second reading yesterday.