Govt. charges and fees to be reviewed
The cost of services provided by the government might increase or decrease once a review is approved by the National Revenue Board under the Fees and Charges Bill 2016.
The proposed change was tabled by the Minister of Finance, Sili Epa Tuioti, in Parliament yesterday.
The bill seeks to amend various Acts of Parliament in relation to fees and charges and to give effect to a Cabinet Directive F.K. (14) 25 dated 16 July 2014.
More than forty government agencies will have their fees and charges reviewed which includes school fees, fees and charges for importation of goods, electricity fees, immigration, national health services etc.
The bill is to ensure all fees and charges for services rendered by government ministries, government agencies, public beneficial bodies and selected public bodies are to prescribe by Regulations made by the Head of State, subject to the approval of the National Revenue Board and the Public Finance Management Act 2001.
Member of Parliament for Salega East, Olo Fiti Vaai told Parliament he did not understand the Cabinet Directive referred to in the bill.
But before he could continue, Prime Minister Tuilaepa Sa’ilele Malielegaoi cut in to remind him about the pre-Parliament sitting briefings for Members of Parliament.
“Because of your absence in the pre-sitting (on Monday) you do not understand this,” he said. “How can you understand if government officials attend the meeting to explain the legislations and you expect us to go through it and explain everything for your sake again? It’s a new year and the member is still talking about old stuff.”
The M.P. disagreed. Olo pointed out that Parliament procedures dictate that after every second reading of a bill, he can discuss the legislation.
“I was not absent in a Parliament sitting, only in the seminars. My disappointment is only 12 M.Ps are considering the legislation with 38 other members not understanding it.”
Speaker of the House, Leaupepe Toleafoa Fa’afisi said the seminars are part of the M.Ps responsibility to attend. He reminded everyone that the bill will be referred to the Committee and they can ask questions there.
The Associate Minister of Communication and Information Technology, Lealailepule Rimoni Aiafi said the increase in fees and charges should reflect the quality of services offered.
He questioned the administration of the legislation, wondering why it is based on the Public Finance Management Act when each ministry has their own legislation.
He used electricity as an example. He said this should be determined by the Regulator, not the Public Finance Management Act.
“There are many Acts where the powers are given to a Minister to make recommendation to Cabinet but what I see now is that it’s all being changed to the Head of State,” said Leala.
“An example is the school fees. People are singing the tune of free education but there is contradiction with P.T.A committees’ fees.”
According to the Minister of Finance, the bill is to make sure there is consistency in fees being charged by government bodies.
He clarified that it deals with non-tax revenue which does not affect duty excise and V.A.G.S.T.
“These are the fees the department of government charges for the services they provide,” Sili told the Samoa Observer.
“If I want a new birth certificate I have to pay for it and new passport I have to pay costs."
Sili said one of the objectives is to look at current charges and determine whether there is a need to increase or change the basis to assess those charges.
He pointed out the Revenue Board makes recommendation and it will be up to Cabinet to make the final decision to accept or reject those charges taking into account the condition of our development.
Before a final decision is made Sili said Cabinet has to look at “issues of affordability to make sure we do not deprive low income earners and those in community who do not have access to cash and continue to receive those services from government and not be too concern about the high cost.
“Obviously when we do charge those fees we are going to ensure that we get a decent return to recover some of the costs, bearing in mind to look at the state of economy and ensure that we do not deprive the low income people from accessing those services.”
The Minister said there are 41 different legislations all charging different services fees. The bill is to get an independent and objective review of what those charges are and whether they are reasonable.
“We don’t want cost associated with inefficiency in public service to be added on to the cost of services that we do provide,” he explained.
“We want to be reasonable as possible and ensure it’s affordable. It’s about time we do it. One problem we faced in the past is we didn't review charges for several years and when we do - it’s a fairly large increase to compensate for all years when we should’ve reviewed it.
“The intention of going forward is to conduct annual review of it and if there is need to increase we do it quickly and not wait for five years where an increase to a level that is not sustainable and people cannot afford.”
Asked if it is a ploy that instead of the government increasing V.A.GST they are now looking at other avenues, Sili rejected the claim.
He referred to a his budget statement earlier this year “where we did say we will be reviewing our taxes and currently we are in the process of customs duty, our excise, income taxes and corporate taxes and that will also include a review of our V.A.G.S.T rate.
“Its important that we review all of that. Whether we increase or not, I think we need to do a lot more work and consultation with the public to make sure that whatever we come up with at the end the recommendation will be in line with our government thinking that we generate additional domestic resources to pay for our own budget and not have to depend on developing partners and not have to borrow.
That is the whole objective. We need to balance a review of the taxes with our review of the none tax charges which is what we’re talking about this morning (yesterday).”
Sili was also asked about the government looking at increasing charges and fees while the minimum wage still stands at $2.30.
“We are not saying we are going to increase. We are saying we will review the department charges, it does not necessarily mean we will increase it across the board.” he said.
“It might be selective charges that have not been reviewed for 10 – 15 years obviously we need to bring that up to date but we are not doing this review with the view to increase them.
We may increase some we may decide to reduce some of the charges.”
But it will still affect the general public especially the low income earners and unemployed?
“It will obviously affect them,” confirmed Sili.
“Some of the things we look at is income tax. There is a current fresh hold that if you’re earning about $15,000 per year you are exempt from tax. So the review might decide to come up with a recommendation that we increase that fresh hold from $15,000 to $18,000 and everybody earning (less) will not have to pay tax so obviously it’s a consideration of economy, looking at incentivize our people to work hard and for government not to take away their money.
“I’m keen to make sure the ultimately goal its going to be a balance view. Ultimately in terms of minimum wage obviously that is under Ministry of Commerce Industry and Labour we need to look at. That is why its important to keep an eye at cost of living and affordability because obviously then we need to also look at impact of those low income earners those who are on daily hourly rates.”
Sili reiterated the government wants to be “fair and equitable if it means increasing minimum wage then we should do that but we have to go through this exercise. The objective of legislation is to review of taxes that we did say will do earlier this year in the budget address.
“We are looking at draft a recommendation by end of January we do need time to make sure we look at every aspect of revenues to be sure that it’s fair and equitable and not going to create hardship for some of our people.”