The executive summary of the proposed Fiscal Year 2018 budget presents an ideology of how the spending plan for the American Samoa Government was compiled.
This financial plan seeks to finance government activities in fiscal year 2018 with an economic development strategy, aimed at bolstering our economy.
In essence, it will foster the injection of needed capital to stimulate economic activities with expected subsequent generation of jobs.
Overall, the financial plan continues to place emphasis on expanding the economy of American Samoa and maintaining our service priorities while moving us towards attaining our goal of a balanced budget.
As we reported yesterday, the total proposed budget for ASG in the new fiscal year which begins October 1st is $391.5 million, an increase of 4% or $14.4 million more than the current year budget of $380.4 million.
In an unprecedented move, the Lolo Lemanu administration is submitting the budget in two parts, the actual budget and a supplemental budget.
Usually supplemental budgets are submitted several months into or close to the end of the fiscal year.
Local revenues are budgeted at $96.8 million, a drop of 10% or $11.3 million over the FY2017 local revenues.
That is how much local revenues dropped in the current fiscal year.
And how does ASG plan to raise that money?
- $61.5 million is to come from taxes;
- Individual income taxes would bring in $25.2 million
- corporate taxes would rake in $11.8 million.
- Excise taxes total $19.5 million
- soda tax is estimate to raise $3.5 million and cover over tax is estimated at $1.5 million.
Other sources of local revenues are:
- charges for services would raise $6.6 million,
- Interdepartmental charges rake in $5 million,
- Fees and Fines would generate $4.5 million,
- licenses and permits would raise $1.5 million and
- transfers in, would bring in $14.7 million.
The budget summary says the excise tax collection on cigarettes took a dive in the current fiscal year due to “pending contractual issues with off island vendors, including constrained market forces that are beyond our control.
“Cigarette imports have slowly become normalized as outstanding issues worked themselves out, according to the budget summary.
“The newly appointed deputy director for the revenue division of Treasurer has a plan incorporating a process for better enforcement and especially to support the newly submitted revenue measure to the Fono.”
The summary states that corporate tax revenue is expected to be weak in the new fiscal year due to uncertainty in business market conditions.
And partly because most businesses have better bookkeeping of their goods and services taking advantage of available look holes to legally pay less in taxes.
Regarding revenues expected from licenses and permits, the budget summary states that revenue collections are expected to be slightly higher than last year “partly due to businesses obtaining licenses and permits for the most part to move their projects forward.”
Its anticipated that the actual revenue collections will exceed the normal levels due to numerous major economic activities implemented by the private and public sector.
In addition, government policies to better monitor the registration of new businesses is to increase revenues under this category.
