AMERICAN SAMOA BUSINESS COMMUNITY SAYS TAX INCREASES ARE AFFECTING

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By Fili Sagapolutele

PAGO PAGO, American Samoa (December 9, 1998 - Samoa News)---Beer sales have dropped in the Territory while cigarettes prices are about to jump next year.

Those two issues were brought up during the American Samoa Chamber of Commerce meeting yesterday to elect the association's board members.

Results of the election will be announced soon.

A member told the group, made up of 47 local business in the Territory, that the increased tax on imported beer -- from 150% to 190% -- has caused a drop of about 20 percent in sales.

Chamber members appeared before the Fono (legislature)earlier this year during its review of an administration bill to increase taxes on beer, cigarettes and tobacco to raise revenue. The funds raised will be used to repay the government's loan from the American Samoa Government (ASG) Employees Retirement Fund.

The group noted that the Chamber's predictions were right that the increased tax on beer would drop the sales volume.

The drop in sales will also change the amount of taxes collected from this source of revenue.

However, so far ASG has been able to keep current its payments on the $10 million/10 year retirement fund loan.

One distributor said yesterday that although they are seeing a slight drop in their volume, they expect to pick up sales during the holiday season.

Regarding cigarettes, it was noted yesterday that there is going to be a substantial increase in prices from the manufacturer, which will be passed on to the customer. The consumer will also have to absorb the current tax increase signed into law for cigarettes.

"If the manufacturer's price increases, there is an increase all the way down the line," said one business owner.

During the Chambers meeting, the membership was also updated concerning their relief drive to assist victims of a tsunami that hit a province of Papua New Guinea in July.

A container from the group, totaling $300,000 in goods, arrived safely and the goods are being distributed to survivors in the area.

Other accomplishments for the Chambers in the last 12 months include joining a forum with the Rotary Club to address concerns about ASG borrowing from the Retirement Fund to pay local vendors, sales tax collection and container tax on alcoholic beverages.

Additionally, the group is improving its working relations with ASG by joining the Department of Commerce in hosting the Territory's Trade Fair, working with DOC on ending the hold-up of business licenses renewals for 1998 and assisting in distributing American Samoa's National Park brochure.

CHAMBER OF COMMERCE TO CONTINUE TO OPPOSE TAX INCREASES

By Fili Sagapolutele

PAGO PAGO, American Samoa (December 9, 1998 - Samoa News)-----Any tax increase that will have an impact on the local business community will be closely monitored by the American Samoa Chamber of Commerce in the upcoming new year.

The Chamber was very active during the last legislative session by testifying on legislation that would have an impact on the business community, especially on the legislation to increase the tax on soft drinks, cigarettes, beer and alcohol.

During yesterday's meeting of the business association, Chamber President Alo Dr. Paul Stevenson reminded the membership of their accomplishments in the 1997-1998 year, especially in opposing bills that would increase taxes affecting local business.

Although lawmakers managed to pass tax increases on cigarettes, beer and alcohol as a source of revenue to repay ASG's $10 million loan from the ASG Employees Retirement Fund, the Chamber managed to halt the tax increase on soft drinks and gasoline.

The Chamber also helped defeat an earlier bill to increase the tax on cigarettes that was lumped together with the proposed tax increase on gasoline.

Stevenson pointed out that the media has been reporting the possibility of the Governor seeking to increase taxes in other areas and called on the membership to work together to keep ASG from continuing to hurt local business with all its proposed tax increases.

Although Governor Tauese Sunia has not publicly announced he will introduce legislation to raise current taxes or to implement new taxes, rumors have circulated to this affect. Governor Sunia is off-island.

"The Legislature will have to carefully scrutinize those tax increases and the impact on our local population," said one lawmaker when asked for a comment yesterday.

"Unless lawmakers have a thorough review of the government's records, there is no way new taxes will be passed by the Fono (Legislature)," the lawmaker added.

An advocate of no tax increases, Rep. Muavaefaatasi Ae, Jr. told Samoa News in a telephone interview, "Before the Fono could look at any bill, the government will have to provide a complete report of its spending for FY '98."

Stories from the SAMOA NEWS, American Samoa's daily newspaper, may not be republished without permission. To contact the publisher, send e-mail to samoanews@samoatelco.com. For additional reports from the Samoa News, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/Samoa News.

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