Unfair competition. Corruption at worst
Competition – whether its business or anything in life - is always good when it is fair and played by the rules.
But when one competitor gets unfair advantage over another, the competition turns into a joke and the competitors – especially the one at the receiving end of the bad treatment – becomes cranky, loses hope and sometimes they might just walk away completely.
Which is easy enough to understand. What’s the point of competition if it is unfair? Why bother to put up with the madness?
The plight of local businessman, Manu Meredith, which was highlighted on the pages of this newspaper this week comes to mind. His story was published on the front page of Wednesday’s Samoa Observer under the headline “Business cries foul.”
Thanks to documents leaked to the Samoa Observer, Mr. Meredith has called on the Ombudsman, Maiava Iulai Toma, to investigate the Ministry of Revenue over “practices regarding import and duty compliance” in relation to liquor sales.
The Owner of Le Well believes there is something very wrong with how the Ministry is treating some of his competitors – especially certain foreigners doing business in Samoa.
The letter obtained by the Samoa Observer indicates that the exchanges between Le Well Company Limited and the Ministry of Revenue over Mr. Meredith’s concerns have been ongoing since 2015.
“We believe there are Customs officers that purposely overlook the correct quantities on certain alcoholic beverages orders by some of our local competitors, in order for those companies to pay less than the required duties, thereby making the retail prices lower than they should be,” the letter reads.
In November last year for example, Mr. Meredith wrote to the Ministry calling for “fair competition.”
“The intent of my communications with your department is reassurance that there is fair competition across all suppliers of liquor imported as well as produced locally,” the letter reads.
Mr. Meredith pointed out that “local spirits with 30% over alcohol content should have a tax of $19.96 per liter plus 15% V.A.G.S.T [Value Added Goods and Services Tax] (not including labor, materials and profit etc).”
He said the selling prices for liquor 1liter claiming to have 45% alcohol content is $21.00 including V.A.G.S.T.
According to Mr. Meredith, these prices they have researched assumes these local liquor products have less than 30% alcohol content, then the pricing would be in line with local tax requirements.
He also directed the C.E.O. to a local wholesale who has been selling wine reportedly from Europe yet the local price “is very cheap for European improved wines.”
“I do not want to assume that your office or some officers are overlooking these matters but I want to be reassured the competition from local businesses are all treated fairly,” said Mr. Meredith.
Now fed up with waiting for answers from the Ministry of Revenue, Mr. Meredith has gone one step further and asked the Ombudsman for an investigation.
“We feel it is also necessary that an external investigation should be made into these practices so that we are being treated fairly and will not have to question the integrity of this very department.”
There are always two sides to a story. It will certainly be very interesting to hear or see a response from the Ministry in question. It would also be great if the Ombudsman could confirm if he would investigate Mr. Meredith’s concerns.
Purely judging by the points expressed by Mr. Meredith in the correspondence leaked to your newspaper, we believe these are serious concerns and they should not be brushed aside and hidden under the mat.
Instead the government should make it an absolute priority to launch an investigation into them.
Why? Aside from the fact that these are serious allegations, we are potentially talking about thousands - possibly millions - of lost government revenues if what Mr. Meredith claims is indeed true.
In other words, this case is more than just business competition. It’s about transparency, accountability and addressing the potential of corruption in the system that gives people unfair advantage over others.
After all, during the past few months, the Ministry of Revenue has been hammering the point that everyone has to pay their fair share of taxes. Fair enough. Even Church Ministers and the Head of State now are no longer exempt.
But we’d hate to think such desperation is the outcome of monies being wasted by poor tax collection, unfair competition and at worst, pitiful corruption.
What do you think? Write and share your thoughts with us!
In the meantime, have a peaceful Sunday Samoa, God bless!