Price hike 'kick in gut for the poor'

By Lanuola Tusani Tupufia ,

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Tafua Maluelue, Fonotoe Pierre Lauofo ma Tialavea John Hunt.

Tafua Maluelue, Fonotoe Pierre Lauofo ma Tialavea John Hunt.

Basic food items like bread, sugar, salt among a range of other products will now cost you more. And with the minimum wage remaining the same, the increase in the cost of living has been branded as another kick in the gut for the poor in Samoa.

Effective on Friday 1st July, the new Control Price Order covers beer and other sugar and salt related products. Other products affected by the excise tax of 8 percent include instant noodles, pastries, cakes, pancakes, pizza and while there is a 51sene increase on a litre of mineral water, other water products –flavoured or otherwise. 

A packet of Pall Mall cigarettes of 20filters that used to cost $10.50 is now $11.50. The price tag on a loaf of bread varies from supermarkets to smaller stalls who are now selling bread for $2.30. 

According to the Special Price Order approved by the Ministry of Commerce, Industry and Labour, the retail price for a pound of sugar is $1.20 while a pound of chicken leg is $2.30. 

The change follows a new Excise Tax Rate Amendment Act 2016 that was passed in parliament last week. 

In Parliament last week, the Minister of Revenue, Tialavea Seigafolava Hunt, said the increase is necessary to try and curb the consumption of unhealthy food and cigarettes.

“The government prioritises the health of its people,” he said. “This is the reason for the excise tax on cigarettes, alcohol and products that we know will greatly affect their health.”

But not everyone welcomed the increases. 

Some Members of Parliament argued that it would only hurt low-income earners even more and urged the government to reconsider.

M.P. for AleipataItupaiLalo, TafuaMaluelueTafua,questioned the increase.

“Ordinary bread has 8percent excise rate and noodles has a similar rate,” Tafua pointed out. 

“These are basic items, a necessity that are used daily by the public. If we increase it – it will affect the whole country.”

M.P. for Vaisigano No. 1, LopaooNatanieluMua, agrees. 

He told Parliament the increasewould be felt gravely by the people of his constituency who need sugar everyday for their lemon grass tea. 

“For the increase in petroleum this will affect the community as fuel is needed for transportation.” 

M.P. for Anoama’a West, Fonotoe Pierre Lauofo, also spoke about the proposed change. 

He questioned the awareness programmesbeing run by the Ministry of Health and their effectiveness. 

“Aren’t those programmes working?” asked Fonotoe. “Or does it need more support to drive those (health) incentives? I suggest that we remove the excise tax on salt and sugar as its used everyday by our people.”

Fonotoe also asked whether the tax will be collected for the Ministry of Health in order to implement their programmes as a mechanism to resolve non-communicable diseases or whether it is to establish the Health Promotion Foundation or will they be included into the Ministry of Revenues tax collection.

The former Associate Minister of Health, GatoloaifaanaAmatagaGidlow queried whether the change applies to cakes which are made in Samoa and for koko Samoa sold on the roadside.

But the Associate Minister of the Ministry of the Prime Minister, Peseta VaifouTevaga offered a different perspective.

He said the important thing is if the item is expensive it can pressure people to have second thoughts about buying them.

M.P. for Falealili East, FuimaonoSamueluTeo raised concerns on the tax. 

He added that Chinese salt should also be banned as it has been classified as unsafe by doctors as it may lead to cancer. 

He suggested that the proposed change should be reconsidered and brought down to 2percent rather than 8percent intended.  

Associate Minister of Communication, Information and Technology, LealailepuleRimoniAiafi clarified that the Bill is for Revenue and not the Ministry of Health. 

About the excise tax, Leala stressed that the ordinary bread, raw sugar, koko Samoa, banana chips and other locally produced products should be exempted.

“Even the tax on mineral water it shouldn’t be there,” he said.

“The low income earners will be the most affected…again I suggest that the local products should be categorized under the zero rate products.”

© Samoa Observer 2016

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