Duty reductions only for essentials: Govt.

Reductions in import duties announced in Tuesday's supplementary budget will apply only to essential goods, such as rice, flour, chicken - and only if discounts are passed onto consumers.

The reduction of certain import duties was included as part of the second supplementary budget passed by Parliament on Tuesday. 

The Chief Executive Officer for the Ministry of Finance, Leasiosiofa’asisina Oscar Malielegaoi, told the Samoa Observer that the discounts were a highly specified policy measure. 

“There is a small list [of goods on which] the Government has suspended the duty taxes and there is a catch,” he said. 

“As Minister [Sili Epa Tuioti] noted in his speech [there is a] move to establish the Price Control Board, to ensure the stores are in compliance.”

He said the prices of the basic food items should be sold as cheaply as the corresponding discount in duties. 

“It defeats the whole purpose of suspending the taxes when the prices are still high; hence the importance of the Government stepping in to control all the prices,” he said. 

According to the stimulus package, the Government will reduce a total of $12.5 million reduction in border taxes under the Ministry for Customs and Revenues (M.C.R.).

These taxes include $3.2 million or five per cent reduction in Import Duty; $3.6 million or five per cent reduction in Imported Excises; $2.4 million or five per cent reduction in Domestic Excises and $3.2 million or two per cent reduction in imported Value Added Goods and Services tax. 

Leasiosio explained that aside from the reduced duty fees for basic food items as part of the stimulus package, the forecasts also include an anticipated decrease in Government fee collection. 

“The supplementary budget also makes mention of reduced revenues for M.C.R. as a result of COVID-19 impacting on our revenue streams from G.S.T., duties and excise taxes,” he said. 

He said this followed an earlier interview in the Samoa Observer in which the Minister for Revenue Tialavea Tionisio Hunt forecast a huge drop in taxes. 

“Samoa is not alone on this,” said Leasiosio. 

“All countries are.”

Tialavea, told the Samoa Observer the $20 million revenue shortfall forecast was due to the global pandemic.

“In going forward there is a drop in collection and we anticipate the amount will climb to more than $20 million,” he said. “And the Ministry is reviewing how best we can help the business community at the moment.”

Last month, the Commissioner for Customs and Revenue, Matafeo Avalisa Viali-Fautua'ali'i, told the Samoa Observer that they had actually collected a total $383,139,801 million and saw an increase of $22.9 million.

The Minister said the $22.9 million surplus will help cover the first three months of anticipated shortfall. 

“But I am not sure as to what is the shortfall by June and there will be challenges with the collection from the Internal Revenue Service,” he added.

“The number will drop.”



Bg pattern light


Subscribe to Samoa Observer Online

Enjoy access to over a thousand articles per month, on any device as well as feature-length investigative articles.

Ready to signup?