Skyline plant closes; total tax audit begins
Skyline, one of Samoa’s fastest-growing countries, has had its alcohol manufacturing business shutdown following a Samoa Observer investigation into its accounting and receipt-keeping practices.
The Skyline manufacturing plant was given the order to shut its doors last week after the Samoa Observer published an investigation exposing its non-standard accounting procedures and provision of loose-leaf receipts to retailers.
The Ministry of Customs and Revenue issued an indefinite closure order after the Samoa Observer revealed on Wednesday it was selling olioli drinks to stores at the cost of the taxes that were imposed on the drinks.
The revelation raised questions about how the company was able to make profits.
For the duration of the plant’s closure the Ministry will conduct a wholesale audit of company finances to determine whether Skyling have allegedly “avoided excise taxes” since 2015.
The Minister of Customs and Revenue, Tialavea Tionisio Hunt declined to confirm whether a“hefty penalty” which was also levied on the company ran into the millions. He said that the investigation followed questions raised by the handwritten on non-standard paper receipts issued by Skyline.
“This is also in line with the Skyline production [in Vaitele] being shut down for audit purposes, thanks to the Samoa Observer’s [investigative] articles that uncovered what was happening,” said the Minister.
“They were shut down last week as soon as [the Samoa Observer] presented us with the receipts”.
The Samoa Observer’s investigation into the allegations of widespread tax evasion in the liquor industry started in 2018. The same issue was raised by prominent businessman, Va’atuitui Apete Meredith, back in 2018.
Calls to Skyline’s spokesman, who has only given his name as “Eric” were not answered as of press time.
The company’s majority owner, Alan Lun Cai, is based in China.
The company, which also exports nonu, is one of Samoa’s fastest-growing companies. Late last year it unveiled plans to employ 300 people at a new $30 million research and development facility and farm.
The Minister issued a stern warning to businesses that were considering “cheating the tax system.”
“They will get caught. We will catch you one way or another and you will be penalised,” said the Minister.
The Samoa Observer first reported about the provision of “fake” receipts to stores last week after non-standard receipts were given to the M.J. Taulafo store in Vaitele, owned by Joanne Taulafo and Seiuli Enoka Enoka, the owner of Ramsi Store located in Moamoa Fou.
Since then some four more stores have come forward, this time in the rural areas such as Falealii, Ti’avea, Matautu and Vaovai.
A storeowner from the Aleipata-Itu-i-Lalo County, who did not wish to be named, provided two receipts to the Samoa Observer as proof of the practice being regular.
“There are two receipts here, the handwritten one ofwhich is my receipt because this is what I paid and the official receipt which they say I can give to the Revenue Office if they come to my store,” claims the woman.
Minister Tialavea commended the Samoa Observer for bringing this “type of illegal activity to light”.
“We need to investigate more pieces as such to assure such [illegal] practices do not continue,” he said.
The Revenue Commissioner, Matafeo Avalisa Viali-Fautuaali’I, echoed the same sentiments via email. .
“Thank you for your valuable support and contribution to this matter,” she said.
In addition to being shut down until further notice, Skyline Co Ltd has been “heavily penalised” for allegedly issuing fake receipts.
“This is also to advise the public that we have investigated the issue of ‘fake’ receipts being issued by the company to some of its clients [and] retailers and have accordingly confirmed the practice to have been done,” the Ministry said in a statement.