The $894.9million Budget for 2016/2017 has been delivered with a twist.
Tabled in Parliament last week by the new Finance Minister, Sili Epa Tuioti, it came with a warning that sugar, salt and fuel consumption could soon hurt you more in the pocket.
The government has revisited a healthy lifestyle tax as a means to generate revenue in the next financial year. This is among a “small number of new revenue measures” in the budget.
Combined with the introduction of a productivity dividend on operating expenditures across all Ministries and S.O.Es, Sili said he expects the proposal deliver ed in the budgeted 3.5percent deficit.
The Minister said the new excise tax is to promote and encourage healthier lifestyle by increasing excise on certain products.
It includes a 6.5percent increase for excises on alcohol, 5percent increase in excise on tobacco products and health excises on select sugary and salty products.
“To expedite these reforms an Excise Tax Amendment Bill 2016 will be developed to amend the Excise Tax Rate Act 1984,” Sili told Parliament.
This time last year there was also a health levy introduced in the House.
The government proposed and initiated a 6.5percent health levy applied to soft drinks, alcoholic beverages as well as another 5percent excise tax on tobacco products.
Prime Minister Tuilaepa Sa’ilele Malielegaoi who was also the Minister of Finance at the time emphasised that government considers it extremely important that people pursue a healthy living.
“Obesity, high blood pressure, diabetes and many other diseases do occur because of what we drink and eat,” said Tuilaepa. “Sadly our young population are the most at risk. Equally important is that the government spends substantial amount of resources every year on treating these diseases.”
Tuilaepa said to break the trend, government proposed a health levy and excise on tobacco products.
But the health sector is not the only area that government is eyeing.
On top of the health excise, the Minister of Finance has also proposed to implement a revision of the petroleum levy and terminal fees.
Minister Sili is looking at an increase of 3 sene in petroleum levy for all fuels, another 2 sene increase in terminal fees for diesel and unleaded petrol.
The Minister also proposed another 28 sene increase in terminal fees for jet fuels.
He made it clear that the budget has to be responsible, visionary and fair.
“A responsible budget must be one that encourages and supports sustainable economic growth,” said Sili.
“The government can contribute to this through a tax regime, which does not stifle incentive. And it can contribute to it by working efficiently and avoiding wasteful expenditure.
“Only a growing economy will provide the revenue we need to continue to improve the services and infrastructure our people need without imposing a heavier tax burden on our citizens or our businesses and stifling incentive.”
Another renewable energy levy of 6.5per litre was also introduced last year.
It is applied on fuel imports to “promote investment in renewable energy sources”.
According to Tuilaepa last year, such an initiative will also deliver the added advantage of achieving the dual objective of lower electricity costs to the consumers and achieving 100percent renewable by 2017.
So far there hasn’t been a major drop in the cost of electricity since.