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The good, bad and the millions owed to the Government

The good news is that taxes owed by the business community to the Ministry of Revenue has reportedly being reduced from more than $100 million to $70 million.  

The bad news is $70 million worth of taxes remain outstanding, which means that as long as this money is uncollected, the Government will have to find a way to fill this gap. And more often than not, these millions are passed onto the taxpayers who submissively and silently pay without a word. 

How? The cost of living increases through hiking the prices of basic utilities and services. That’s just the way it works, there is no other way even if the Government would never admit to it.

Folks someone has got to pay for this and because the people who are supposed to pay have deliberately not paid, or are struggling to pay, everyone ends up shouldering the responsibility.  

It’s sad, isn’t it? After all, we are not talking about 70 sene, we are talking about $70 million. That’s a lot of money. 

Which is why the announcement by the Minister for Revenue, Tialavea Tionisio Hunt, in a story titled “Businesses owe Govt. $70 million in taxes” published in yesterday’s Samoa Observer was bittersweet. 

Highlighting the work done by his Ministry, the Minister said: “Three years ago (2016) the outstanding debts of uncollected taxes amounted $100,000 million plus. Fast-forward to now it has been reduced by 30 per cent.

“I want to commend our Commissioner of Revenue, Matafeo Avalisa Viali-Fautua'alii and her team for their hard and aggressive work with the collections efforts. “This is the most hated profession there is in the world, tax collectors, but the staff strive to meet the goals of the Ministry." 

The Minister went on to say they are doing “everything we can to collect" the remaining amount.

Well that’s reassuring, especially coming at a time when the Government appears so desperate for cash that it is taxing anything and everything – including the Head of State and Church Ministers who were never subjected to taxes before. 

This is on top of the multiple taxes paid by all members of this country who are hit by taxes everywhere they turn. Indeed, people are up to their neck with taxes. 

But just imagine for a second how better off this country would be today if that $70 million had already been collected, as it should have been already? Would the Government still have found it necessary then to tax church ministers and the Head of State? Would all these other taxes levied on businesses and the poor people have been necessary? 

We doubt it. To be fair to the Ministry of Revenue, they are not the only ones struggling to recover monies owed to them. Now just look at the front-page story titled “Bank laments non performing loan accounts in tourism” published on Thursday. This time we are talking about the Development Bank of Samoa (D.B.S.) where “large non-performing loan (N.P.L.) accounts in tourism” had played a “significant challenge” in maintaining “a sustainable level of liquidity” during the Financial Year 2017-2018. 

The accounts also apparently left a negative impact on the operation of the Bank, which also recorded a loss of $2.1 million for the year in question.

“The most significant challenge that has affected the D.B.S. operation is maintaining a sustainable level of liquidity,” the Bank’s Chief Executive Officer, Fauena Susana Laulu said in her report. “Whilst the tourism industry has seen positive growth, a high level of non-performing loans remain, which accounts for 48 percent of portfolio. The repayments expected are inadequate to cover repayments schedule and to reduce loan balance.”

So what is the consequence? Well new loans for ordinary members of the public “were on hold whilst priority was accorded to debt servicing and operation.”

“The N.P.L. accounts hold 48 percent portfolio and accounts only for 10 percent of the total collection in 2018. Lost interest for the period was $1.1 million.

 “In 2018 D.B.S. has paid $13.8 million to debt servicing compared to the $18.5 million of loan collections. The D.B.S. had to source a new debt to support its cash flow commitments.”

Now again, isn’t it sad that ordinary members of the public – including farmers and some of the poorest people in this country – are denied the opportunity because of these millions of unpaid accounts?

By the way, questions from the Samoa Observer to the Bank’s Chief Executive Officer Fauena asking for details of whom the “tourism” accounts belong to, how much the individuals owe and how much all the accounts are worth have not been responded to. 

We believe she should. The Development Bank of Samoa is owned by the Government of Samoa, which therefore means it needs to be transparent with members of the public – especially in cases where millions and millions are owed, impacting on its ability to help some of the poorest and most vulnerable people in this country. 

What do you think?

Have a wonderful weekend Samoa, God bless!

 





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