AMERICAN SAMOA GOVERNOR ORDERS STOP TO TAX PAYMENTS

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By Fili Sagapolutele Special to the Pacific Islands Report

PAGO PAGO, American Samoa (April 11, 2000)--American Samoa Governor Tauese Sunia has ordered Treasurer Tifi Ale to cease payments and recognition of the Child Tax Credit, a benefit adopted from the U.S. federal tax code by the territorial government some three years ago.

"Effective immediately, please cease payment of and recognition of any further claim for the Child Tax Credit. There are no legally appropriate revenues from which to pay these claims," Governor Tauese Sunia wrote to the territorial treasurer in a letter dated March 21, 2000 obtained by the Pacific Islands Report.

"Additionally, passage of this amendment to the U.S. Tax Code represents yet another unfunded mandate from the federal government," Tauese concluded.

Governor Tauese took this stand after the Fono (Legislature) rejected a proposal from his administration to delete the federal tax code item from local laws last year. At the time, the governor warned lawmakers that if the proposal was not passed "it would cost the government between $800,000 and $5 million to fund."

However, that warning was not heeded and the tax credit remains in effect.

In February this year, when Tauese resubmitted the same legislation for approval, he once again warned the Fono that because the credit increases this year to $500 per child, from $400 per child in the past tax year, "it is estimated this credit will cost us an additional 20 percent or between $1.8 million and $2.4 million."

"In our extremely troubled fiscal times, we simply cannot continue to absorb this cost. It is imperative that this credit be deleted from our tax codes," the governor wrote to the Fono leadership.

Lawmakers ended the Third Regular Session of the 26th Legislature on March 31 without taking any actions on the legislation

Fono deliberations will resume in mid-July.

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