A 7% sales tax, changing the tax table from 2000 to 2004, new sin taxes, $1 payroll deduction fee, gradual reduction of the 5% excise tax on commercial imports and elimination of the 2% wage tax are among recommendations by the ASG Revenue Task Force.
The group rolled out their plan to boost government revenues at a meeting with Fono leaders and members yesterday.
According to the chairman of the Task Force, Attorney General Talauega Eleasalo Ale, if all of the revenue measures in their plan are approved, ASG would raise $27.5 million in additional revenues.
Governor Lolo Moliga was at the meeting in the Fono guesthouse yesterday morning with Senate President Gaoteote Palaie, House Speaker Savali Talavou Ale and key lawmakers.
Senators Galeai Moaliiatele Tuufuli, Magalei Logovii and Paepae Faiai were present.
And from the House side were Reps Vailuama Steve Leasiolagi, Faimealelei Anthony Allen. Gafatasi Afalava, Lavea Fatulegaee Mauga, Puleleiite Tufele Lia Jr, Samuel Meleisea and Steve Leasiolagi.
The administration plans to submit its package of revenue measures in the next regular session of the Fono which begins Monday.
As Talauega explained, their plan is to introduce a 7% sales tax on goods only and gradually reduce some taxes such as the 5% duty on imports for resale and eliminate the 2% increase in the wage tax. This is to be carried out over a 5 year period.
At the same time new sin taxes will be introduced…for example on juice and other sugary drinks , plus heavy equipment and construction related items.
Regarding income taxes, the task force is proposing that beginning next year , the territory replace the 2000 tax table with the 2004 table and continue updating till we are current.
Talauega told the meeting that established businesses reporting no profits year in year out will also be targeted. He said a tax will be charged for such businesses.
Eventually as revenues are increased through the new tax measures, the administration hopes to reduce the wage tax from 6% to 4% .
Also in the plan is a $1 fee for ASG employees with payroll deductions.
A statement by the Task Force chairman that the wage tax was not an honest tax riled some feathers during yesterday’s meeting.
Talauega pointed out that only ASG employees are paying the wage tax while some dishonest private businesses are not paying at all.
Speaker of the House Savali and Senator Galea’i reacted telling the Attorney General to refrain from making such a statement.
They said it was the government’s job to collect the tax.
Senator Galea’i asked why the 2% wage tax would be eliminated when ASG employees have become used to it.
Governor Lolo said that with uncertainty in the state of the economy and without any word from the federal government on funding for the territory.
American Samoa cannot remain idle but must establish a real plan to accommodate the territory’s needs