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By Fili Sagapolutele

PAGO PAGO, American Samoa (March 27, 2001 - PIDP/CPIS)---During the first quarter of fiscal year 2001, the American Samoa government overspent its payroll allocation by $906,000.

Governor Tauese Sunia said the payroll is the government's highest expense. It consumes 80 percent of the annual budget.

Last week, Tauese implemented a "freeze on hiring" to slow down payroll spending and also to counter the government's revenue shortfalls.

Tauese told reporters that all vacant government positions, including those that become vacant in the future due to retirement or cause, will not be filled, if such positions are funded by local revenues.

The new policy does not affect positions funded by federal grants.

Tauese also said that the government will fully enforce its policies on sick leave, compensatory time, over-time and annual leave.

Also to help with resolving the financial woes, Tauese asked the Fono on Monday to pass legislation that would levy an excise tax on items purchased by the territorial government.

"In our continuing efforts to maximize revenues for the government, I believe this measure is long overdue," said Tauese.

"With its numerous on-going construction projects and continual supply purchases, the local government represents in itself a significant source of excise tax revenues. Importantly, in most instances federal grants may be used as a source of payment for the levy," said the governor.

Current law states that all goods coming into the territory for commercial purposes are assessed an excise tax (usually 5%), but the tax is not assessed against the American Samoa government.

Government suppliers are allowed to bring in government-bound goods duty-free or get a refund for any associated import taxes they pay.

The proposed legislation would change that, making the government and its suppliers liable for paying the tax, with no refunds.

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