Tax Office Manager Tagoa’i Vaaimamao Poufa has explained that a High Court decision in a suit against the government is the reason behind an administration bill, now before the Fono.
It amends the American Samoa tax code to specify that tax brackets, exemptions and personal deductions, are maintained at year 2000 levels.
Yesterday, the Tax Office Manager said, at a senate hearing on the bill, that the High Court said, in it’s ruling, that this language should be made clear in the tax law.
The bill stipulates:
“Except as amended by this Title, all adjustments for inflation or cost of living as required by the U.S Internal Revenue Code including those for tax brackets, exemptions, personal deductions, and interest rates are set to the rates in effect on December 31, 2000 in the United States Internal Revenue Code without adjustments, retroactive” to the effective date of Public Law (PL) 27-15, Oct. 22, 2001.
PL 27-15 adopted the Internal Revenue Code of 2000 as the Samoan Income Tax Act. And this means the tax code for the territory was frozen in 2000.
According to the bill’s preamble, the Legislature’s intent at the time was to fix tax brackets, exemptions, personal deductions, and interest rates at 2000 levels.
However, language in the Internal Revenue Code in 2000 provided for automatic change to tax brackets, exemptions, personal deductions, and interest rates, the bill’s preamble points out.
Chairman of the Senate Budget and Appropriations Committee, Senator Utu Sila Poasa, commended the administration for addressing this anomaly.
During the hearing, Sen. Utu asked the Tax Office Manager whether we will get another round of Earned Income Tax Credit payments, of which $16 million was awarded to ASG last year.
Tagoa’i said, the territory will receive annual EITC payments and there’s no local match required.
