Taxes, foreign investors and Church Ministers
Taxes are an essential part of the Government’s revenue collection. It goes without saying that it is the lifeblood of any functioning nation because without them, it is impossible for any Government to plan, implement and fund vital developments projects necessary for people to live happily, progressively and peacefully.
In Samoa, the Government’s position on taxes has been made quite clear. Everybody must pay. So clear Prime Minister Tuilaepa Dr. Sa’ilele Malielegaoi and his administration have gone as far as to invoke the wrath of the church by taxing the church ministers’ alofa, in a bid to make sure everyone pays taxes.
The Government’s position is that every one in Samoa should pay regardless of wealth, status or age. In doing this, they say all individuals and companies should contribute fairly and equally to the development of Samoa’s economy by paying what rightfully belongs to the tax collectors.
And in most cases, people do pay their taxes. Individuals certainly pay their fair share. Apart from PAYE for employees who are above salary threshold, every time you and I buy a can mackerel, or any other product for that matter, we are paying taxes. It’s called the V.A.G.S.T, the tax that hits everyone including some of the poorest people of this country.
When it comes to companies and corporations, there are various taxes they have to pay to comply with rules and regulations set by the Government to ensure equal and fair competition for all. Which is the right thing to do. Most companies do their best to comply, even as they struggle through these extremely difficult times.
But it has emerged that not all companies do and two recent cases of companies being investigated by the Ministry of Revenue expose the fact that some companies will push the boundaries when it comes to avoiding this critical responsibility. Both cases were exposed as a result of investigations initiated by journalists from this newspaper, thanks to sources who saw what was happening and rung the alarm bells.
Last week, a story titled “Skyline plant closes; total tax audit begins” published on the front page of the Weekend Observer highlighted the latest development in the first investigation. The story revealed that Skyline, one of Samoa’s fastest-growing companies, has had its alcohol manufacturing business shutdown over questions about their accounting and receipt-keeping practices.
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 four more stores have come forward, this time in the rural areas such as Falealili, Ti’avea, Matautu and Vaovai.
Speaking about Skyline, the Minister of Revenue, Tialavea Tionisio Hunt 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,” he said. Well that was last week.
On the front page of the Samoa Observer on Wednesday, another story titled “Coin Save hit with three violations after tax audit” revealed another alarming discovery. Like Skyline, the audit and investigation at Coin Save was initiated by the Samoa Observer last year. The red flags went up when customers at two of the chain’s stores were being provided with receipts that were a year out of date. That practice, according to Ministry of Revenue, at the time, was a common means for companies to evade Value Added Goods and Services Tax. That was in November last year.
This week, the Commissioner of Customs and Revenue, Matafeo Avalisa Viali-Fautua'ali'i confirmed that Coin Save has been penalised under the provisions of the Income Tax Act 2012; Tax Administration Act 2014 and VAGST Act 2015.
“We have also completed our audit of this specific issue plus tax audits of its 2015 and 2016 tax returns; [they have] been issued with penalties and [we are] awaiting [a] response from [the] company,” she said. Matafeo refused to disclose how much the company would have to pay.
When the Samoa Observer visited the Coin Save compound in Vaiusu to ask for the company’s sole shareholder, Tu'itu'ioaiga Teeking Weng, he was not there.
Still the name rings familiar. Back in 2017, a document obtained by the Samoa Observer showed that the Chinese businessman had been granted $5.8 million worth of loans from the Samoa National Provident Fund. As of 06 February 2017, Tu’itu’ioaiga’s company, Super Wing Samoa Limited, owed the Fund $5.841, 977.99, with an approved interest rate of 7.2percent.
Why is that relevant to what’s happening now, some people might say. Tu’itu’ioaiga’s loan with the S.N.P.F was brought under the microscope after Samoan members of the business community questioned the Fund, saying it should invest more in local businesses.
“They come as investors,” a member of the business community said then. “What kind of investor comes to Samoa to rely on Samoa’s money? They are not investors, they are using us. I think the government should be concerned about this. If investors come, they have to bring their own money, not come and then borrow from Samoa. This is not right.”
When the concerns were put to Prime Minister, Tuilaepa Dr. Sai’lele Malielegaoi, at the time, he turned and attacked the Samoa Observer instead, saying the newspaper was “negative” and “narrow-minded”
“They should go and enlarge their brain. If not, you should hire people with big brains to write your articles,” Tuilaepa said, defending the Fund’s decision.
“The question is, if these people are foreign investors, are they investing money into Samoa or not? They are investing money into Samoa,” Tuilaepa said.
“The thing that was wrong about your article was that it made it sound as if these money are used out of Samoa. These (businesses) are investing this money into Samoa and they are providing job opportunities for our people. If they just sit around with this money and not do anything about it, then what’s going to happen to us?"
Well isn’t funny then, Mr. Prime Minister? The common denominator between Skyline and Coin Save is that both companies are owned by Chinese who are supposed to be investors.
When it comes to taxes, the Government has already prosecuted Church Ministers whom they claim are not paying taxes. Two investigations have already discovered very questionable practices when it comes to these Chinese-owned companies? Shouldn’t it come naturally therefore that the Government should prosecute them too? But then what do we know? In the words of Prime Minister Tuilaepa, we’re only kids whose brains are not large enough? Take another look.