Government levies two sene tax on fuel

The Government anticipates to collect $1.1 million from a two sene “fair tax” on fuel levied on the public for road infrastructure. 

The matter was raised in Parliament on Wednesday.

Vaimauga Sasa’e's M.P., Sulamanaia Tauiliili Tuivasa, said the two sene levied on consumers for vehicles is on top fuel prices that are already expensive.

But the Minister of Finance, Sili Epa Tuioti, explained that the two sene will help the Government to fix the roads. 

The two sene levy is proposed in the Supplementary Budget for the Financial Year 2019-2020. 

Minister Sili, in his speech on the supplementary budget, stated the plans to introduce a fuel levy of 2 sene per litre in January 2020 "will be used to assist in the maintenance and building the resilience of roads, drainages, footpaths and walkways for the country.” 

M.O.F. Chief Executive Officer, Leasiosiofaasisina Oscar Malielegaoi, explained the funds from the two sene will go directly towards the upkeep of roads infrastructure.

“This is a fair tax levied on every car; the two sene is not just for fuel, it is also applied to the diesel and kerosene. This tax is reviewed every five years and this is due to the condition of our roads," he said. 

“We must build resilient infrastructure that have to be disaster proof to withstand any disaster; back then tropical cyclones it used to remain in category one; but nowadays other cyclones have reached up to category. This tax will go directly to infrastructure of the roads and sewer lines.” 

According to Leasiosio, for Financial Year 2019-2020, $2 million is allocated for the Taufusi road on Vaea Street. 

“And the cost to disaster proof our assets are relatively expensive, meaning the electrical wires will be underground. We will not use electricity poles anymore," he added.

“All wires, electricity, phone lines [and cable lines] will go underground. This new initiative will also lead to the removing of water pipers to the side of the road. 

“Our roads were widened in the 1990’s and the water pipes were not removed and it remained in the middle of the road. That’s why when a water pipes needs repairing the road are cut right in the middle. 

“However that will change. Our roads will be built to the international standards whereas the water pipes will be removed to the side of the road.” 

He said the only way to fund the disaster proofing of Government assets comes from the two sene levied. 

Earlier this month a statement issued by the Ministry of Finance points to the retail price for petrol dropping from $2.89 to 2.57 per litre, diesel by 23.8 sene from $3.02 to $2.79 sene per litre, and for kerosene by 19.9 sene from $2.66 to 2.46 sene per litre.

“Substantial decreases were recorded across the three product grades. Easing prices further the Tala strengthened against the US$ by 1.3%. 

“Fears of a reduction in global growth rates combined with the USA / China trade stand-off is being touted as the cause of the weakening in demand for crude oil and hence reducing oil prices,” stated the M.O.F. statement.



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