Tax hikes, cost of living and unkept promises

By The Editorial Board 22 May 2025, 6:10PM

Prices of everything are increasing. First, parking at the airport, then at the wharf and now the National Revenue Board (NRB) has approved an increase in the proposed new departure tax and the aviation security fees.

This seems to be an indication of what could be in the pipeline with all government services that include a fee. It seems the government’s plan to increase revenue is increasing taxation, in this case, increasing prices of the services that are charged by the government.

Once the new departure tax and aviation security charges are implemented, people will pay an extra $130. On top of that, anyone entering the airport will pay an extra $10 as an exit fee. The Samoa Airport Authority is looking at an estimated increase in revenue of over $20 million annually. The Samoa Ports Authority is also charging a parking fee at the wharves now. It looks like a trend, and it would come as no surprise if other prices for other government services go up.

Air fares are not cheap. People will start paying an extra $130 once the new charges are implemented. For a family of five, this equals $650 on airfares. This does not include the $10 paid by the family members who will be seeing them off at the airport. Some people are not entering the airport in their vehicles and are choosing to park outside the airport gate to avoid the $10 fee. This shows how steep some consider the $10 fee to be.

The national minimum wage rate is $4 now and in a little over a month, it will go up by 84 sene. Some employers are not complying and it is doubtful that they will when the July increment kicks in. Food prices are increasing and there has been no price control order for the basic food items. Getting an education remains expensive, the social welfare assistance is limited to the elderly and the disabled, which is $100 a month. There is no assistance to those below the poverty line, such as concessional bus fares for children, access to free education or monthly welfare payouts to ensure that families can have a decent meal.

Is the government sleeping and are the elected leaders truly representing their people in the way they should be? Why increase fees when entities are already making a profit, and why do it at a time when the cost of living is high? Perhaps the increases in service fees would be reflected in increased government spending and job creation within the public service. Perhaps with more revenue, the Airport Authority is looking at expansion and upgrading the facilities. That waits to be seen.

As at the end of the second quarter of the financial year 2024/25 (December 2024), total public debt stood at $801.9 million.  The debt to GDP ratio stands at 23.2 per cent of GDP. This is amazing and also makes the need to increase revenue by increasing such service fees questionable. If the debt is dropping, this means there is more revenue.

The concern here is that the increase in such service fees always burdens people. If the cost of living were brought down and then taxes increased, it would make sense. That way, people would be able to afford it. What is being done to bring down the cost of living and support exports? Have we managed to increase agricultural and fisheries exports? The Samoa Bureau of Statistics figures show a downward trend for these industries.

Is everyone able to afford education and health services? Are there enough teachers, doctors, nurses and qualified professionals filling in the labour shortage? Maybe the reason why taxes will be increasing is to do all this. We will see all these things talked about in election promises, which to date have remained a fallacy.

Now, it is a waiting game to see when the new taxes at the airport will be implemented and surely, there will be complaints about how air fares have increased.

By The Editorial Board 22 May 2025, 6:10PM
Samoa Observer

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