It really is time for the Samoan Taxation System to be overhauled, a long overdue in fact!

How about scrapping all taxes including VAGST and Customs Duty and implementing a flat rate, say five or ten percent tax, wherein everybody pays!  

•             Currently people in the workforce - who earn under $275/week don’t pay tax.  

•             Farmers don’t pay tax.

•             casual workers don’t pay tax.

This indicates a minimal number or the approximately seventy-five thousand labor force actually pay tax.  

This further means that only some twenty-five thousand workers who earn above seven tala an hour and the small number of Corporations and Sole traders are carrying the economy.   

It’s no wonder we have an underfunded and understaffed:

1.            Health department – essential service and serverely underfunded

2.            Education department - essential service and serverely underfunded

3.            Police department - essential service and serverely underfunded

If staff at all the above departments were paid properly then we would have a Healthy, Educated, Law Abiding Society!  

The Government doesn’t have the income to pay them. What income the Government does have is spent on paying off overseas debt, minister travel and repairing roads etc.  

Solution:

1.            With a labour force of some seventy five thousand averaging five tala an hour, this would equate at a ten percent tax rate of twenty tala per week.  Multiply that by seventy five thousand and we suddenly have One million five hundred thousand ($1,500,000) in PAYE tax, per week which equates to $78,000,000 per year

2.            Now if you really care about the People of Samoa, you would know that taking twenty tala out of their weekly pay is not acceptable so:

3.            Increase the minimum wage to ten tala per hour.   This will result in an annual PAYE revenue of $156,000,000 with an increase of $160.00 per week in the “average” Samoan worker’s pocket.  This means that the average worker can now educate his children properly, feed them properly and spend more in the retail area.

4.            This means more money spent in the retail sector, more turnover, more profit and more profit.

5.             If corporations such as Supermarkets, building Suppliers etc were only paying a ten percent tax rate then their products would become cheaper, their turnover (sales) would go UP and overall tax collected would go up.

6.            Further, by removing VAGST, goods become more affordable and again more Company turnover. Sure, wages costs, SNPF and ACC contributions would increase but this “should” be partially offset as these wage increases would provide for better productivity.   The advantage to the labour force would be not only the amount of disposable income but the increase in the SNPF savings.

7.            Lower all Customs charges to 8%, remove the 15% VAGST as per above and thus again allow a reduction in the cost of goods.  Again, an increase in turnover, and increase in profit and thus and increase in tax – at 10 per cent.

How is our economy going to survive with the ongoing “brain drain”?  

How is our economy going to survive with the ongoing seasonal workers debacle.

How is our economy going to survive – sending another 500 workers to Pago to work in The Starkist plant?

It won’t!!!!!

 Department of Customs:

 Why do imported goods have such high duty rates?  This is a reflection on the Government’s inability to introduce a fair and equitable taxation system.  Rather than have a taxation system that supports the economy and the need for Government revenue:

 1.            Imports are not only outrageously taxed (20% for a TV or airconditioner remote control) but, there is a 15% VAGST (?) applied on top of this to make sure that Importers pay the point of sale VAGST.   Wasn’t the TIMS system supposed to eradicate that problem?  

2.            Are you aware Mr. Taxation Minister that “Safety Gear” attracts a 20% duty (+15% VAGST) rate.  So, now you know why there are so many workplace accidents.  Contractors can’t afford things like Safety Boots!  Never mind that The ACC cover these accidents. Tough if you only have one usable foot!!!  And to make matters more laughable, Government is pushing Safety as an issue!

3.            Did you know that equipment imported for warranty replacement is dutiable?  Well in actual fact, it’s not!  But two senior officers in The Department of Customs will tell you that it is.

4.            I note that the duty rate for electric cars (EVs) has been reduced to five percent (+15% VAGST).  That’s ridiculous!  Shouldn’t have happened.  There should be no duty on EVs as they actually reduce the amount of fuel required to run them (charging) by a minimum of 50%.  Further if the owner of the vehicle has a solar installation then the reduction in fuels costs is 100 per cent!  Is anybody listening?

5.            It is the same with solar equipment, NO duty should be applied as solar installations actually cost the Government LESS to run the economy.  Anywhere else in the world the buyer receives a Government rebate.  Here, No!  Just tax the people more.

6.            Lovely new road out to Faleolo, the money would have been better spent on a railway with minimal maintenance costs.  Anyone heard that word around here before???

7.            We are the people of Samoa and we are not here to have our lives pushed into the mud so a few huge unnecessary projects can be erected.

 You can only get so much water out of a bucket and if it doesn’t rain, then you’re in deep trouble - $800,000,000 debt!