New tax system will not be delayed: Minister
The Government's new Tax Invoice Monitoring System will go live from 1 July 2020 despite an appeal by the Samoa Chamber of Commerce and Industry to defer its nationwide rollout.
The Minister of Customs and Revenue, Tialavea Tionisio Hunt, told the Parliament that the switching on of the electronic monitoring system will go ahead despite an appeal from the Chamber for more time.
"It will not be postponed," he said.
"This system (T.I.M.S.) was discussed in last year's budget and commissioned on March 4 this year,” he said, in response to concerns by the Member of Parliament for Falealili East, Fuimaono Teo Samuelu.
“Time was given to the first group, 210 businesses in this group, we gave them four months to ensure they are compliant and use the system starting on July 1. And it will not be postponed, this system will start in July. All these 210, we advise that they come to the office to discuss.”
With 210 businesses already registered to trial the T.I.M.S. next month, Tialavea said the Ministry foresees another 1,500 joining within the next three months, followed by another 2,000 in the months that follow and 3,000 representing the last group. The authorities expect 8,210 businesses to register.
Thanking firms that stepped forward to get themselves registered, the Minister said it is part of the Government’s efforts to ensure everyone paid their tax.
"It is the Ministry's expectation to collect V.A.G.S.T. from everyone. The reason why this system was acquired is to ensure that every G.S.T. is collected from all companies," he said. "To all the complying companies, thank you. But this is why the system was brought in, to ensure that everyone is paying, as many say there are still some businesses who are evading tax."
Businesses that attempted to cheat the system will also be caught and slapped with heavy penalties, Tialavea warned.
"The advice given through me to all these businesses is to discuss with the Ministry, as should the 210 businesses not be in compliance with the system by July 1, a penalty will automatically be issued," he said. "But if they come into the Ministry office, they will negotiate and act accordingly for any other options in the future available.
“According to Ministry assessment, this 210 already has equipment that can use this system, which is why they have been put first, many of which are large businesses and others the Ministry knows they are able to use the system already. So I apologise but this system will not be delayed, it will start on July 1.”
The T.I.M.S. requires software installation to existing systems that are currently used by local businesses, though according to the Chamber, out of the 117 responses to their T.I.M.S. survey findings, 52 businesses or 44 per cent of the respondents reported that their business does not currently have a Point of Sale (P.O.S.) software. Consequently, they manually generate invoices through the use of receipts, cashbooks, and Excel.
The Chamber survey revealed that while other businesses have one station or counter for their P.O.S., another 70 per cent have multiple, meaning some businesses will spend more in order to comply with T.I.M.S. requirement.
Additional hardware for businesses in the implementation of T.I.M.S. reportedly will vary but costs may reach $70,000 for hardware alone to be fully compliant.
According to the survey, a total of 22 per cent of the businesses report having received a quote for the work required of the software provider to meet compliance with costs ranging from $2,000 to $400,000 tala.
"The three most prominent responses were in regards to financial constraint, lack of training, and insufficient timeframe given current business conditions," the Chamber survey reads. "Close to 40 per cent of businesses are unable to implement T.I.M.S. within the current timeframe due to financial constraints. The financial costs incurred to comply with T.I.M.S. will be felt more severely amongst Small to Medium Enterprises."