Member of Parliament, Olo Fiti Vaai, has claimed that the government is “financially desperate” with their decision to tax the Head of State and Church Ministers.
He has also questioned the factuality of figures provided by the Ministry of Finance on the budget for 2017/2018 where the surplus is in millions and yet the government intends to tax church Ministers.
His concerns were raised when Parliament convened yesterday to debate the budget tabled by the Minister of Finance, Sili Epa Tuioti, last month.
“If the figures are accurate in terms of surplus, it increases year after year,” Olo said.
“Mr Speaker, I believe the V.A.G.S.T [Value Added Goods and Services Tax] should not be increased until the end of time.
“Secondly why are we levying taxes against the church ministers, if the figures are accurate that the surplus is in millions? Then why do we need to add anymore burden onto the public?”
Olo pointed out that it’s members of the public who end suffering.
“This word faifeau is just a cover when the reality is that it’s the public that is paying for the taxes. It’s not their money, so they don’t care about their salary being taxed because it’s the public that is being taxed again.”
Outside Parliament, Olo told the Samoa Observer the government is desperate for money.
“I didn’t think our government was that desperate,” he said.
“When I looked at the surplus that is collected from last year and this year, it’s more than $30million. And yet they intend to add more taxes, they are looking at adding taxes on alcohol. Then there’s church ministers the government wants to tax. That is how desperate they are. Now I didn’t know it was this bad.”
According to Olo, if the government is claiming that the economy is doing well, why do they need more taxes.
“The government claims that Samoa’s economy is in a good place, this is according to the figures the Ministry of Finance is giving us.”
He added that members of the public are tired of paying taxes.
“Our taxes started off with seven percent, then it increased to 15%. If the government was in a stable financial status, the government would repeal the V.A.G.S.T given that the economy is in a good place.... but I guess it’s not. Hence the need to find out whether the figures are accurate.”
Going back to taxing of Church Ministers, Olo said anyone who can read between the lines would know the taxing of church ministers is literally an increase of the V.A.G.S.T.
“They are taxing the faifeau, but who is providing the money for the peleki and the alofa? It’s the public, that’s how I look at it. They just front the faifeau’s name yet it’s the public that is paying for it and it’s literally an increase of the V.A.G.S.T.”
Minister of Finance, Sili Epa prior to tabling the budget for 2017/2018 in his financial statement earlier this month, noted that during the Revenue Review that was announced at the 2016/17 Budget Statement was tasked to examine Samoa’s current taxation arrangements, including:
• Examining current tax bases and rates and providing advice on the extent to which they reflect reasonable contributions by tax payers;
• Identifying anomalies in current tax bases, tax rates and tax exemptions;
• The efficiency and effectiveness of tax collection and tax enforcement.
The Review was also asked to examine current taxation procedures and recommend improvements it considers will support the purpose and objectives of the review including:
• Reviewing the current arrangements for the granting of exemptions and concessions;
• Improving procedures for dealing with arrears;
• The use of tax holidays or other concessions;
• The use of tax credits.
Sili pointed out to the Speaker that the main features of the Review recommendations are:
• Strengthening compliance with existing tax requirements, including compliance by taxpayers and improving the effectiveness of the revenue collecting agencies, including the Ministry for Revenue;
• Removing a number of exemptions and concessions to improve the equity of the tax system;
• Increasing non-tax fees and charges and indexing these fees and charges to ensure that the revenue raised more accurately reflects the costs of providing the services to which these fees and charges relate;
• Increasing a number of duty and excise rates;
• Introducing an equalization charge on EPC; and
• Introducing a Telecommunications levy.
The Review has also recommended changes in current taxation arrangements designed to:
• Ease the income tax burden on lower paid employees and sole traders; and
• Lower export taxes and some duty and excise rates to support the competitiveness of Samoan businesses. “These changes would be introduced over the next financial year with timing dependent on changes to legislation and administrative procedures which would be required.
The net anticipated revenue gains from this package of reforms are estimated to be $14.1 million in 2017/18, increasing to $30.6 million in 2020/21,” said Sili earlier this month.
Prime Minister Tuilaepa Sailele Malielegaoi told Samoa Observer in an earlier interview the government has not ruled out the possibility of raising the Value Added Goods and Services Tax (V.A.G.S.T.).
Standing at 15per cent today, it is one of the taxes being reviewed as part of the Ministry of Revenue’s efforts to review all existing laws on income tax. The Minister of Revenue, Ti’alavea Tionisio Hunt, told the Sunday Samoan the V.A.G.S.T. is definitely being reviewed. Setup Timeout Error: Setup took longer than 30 seconds to complete.
“For the V.A.G.S.T, there might be an increase but not a big one,” he said. “It will just be two and a half cents. But nothing has been finalized yet.”
Prime Minister, Tuilaepa Sa’ilele Malielegaoi, also confirmed the plan.
“I’ve heard stories about it, and I heard that an extra two cents will be added to the existing cost of V.A.G.S.T,” Tuilaepa said. He went on to say that this is just a “small raise.”