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Better tax collection, reduced public workforce suggested

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, April 4, 2012) – Instead of imposing more new taxes and fees on the private sector, Chamber of Commerce chairman David Robinson has suggested that the American Samoa Government reduce its workforce and be more diligent in collecting current taxes as well as lease payments on government land.

Robinson was speaking Monday before a House committee called to hear testimony from the private sector on the proposed new hikes in taxes and fees, along with a new corporate franchise tax and a 4 percent wage tax to fund a $10 million appropriation bill for the LBJ Medical Center off island medical referral program.

Robinson said "we seldom hear of plans by the government to make serious reductions in the cost of its operations, to try and balance the budget, or even run a surplus." He noted that ASG has over 5,000 employees — 1 public servant for every 11 men, women, and children in the territory.

He said the Chamber believes that there are far better and more effective ways for the government to raise money rather than continually trying to penalize the private sector with increased taxes and charges.

For example, ASG could implement a more effective system of corporate and personal tax collection, and a more efficient way of collecting import duties at the port, he said.

ASG also could be more diligent in collecting lease payments for land leased at the Tafuna Industrial Park. Additionally, it could reduce department costs by a reduction in staff numbers and a resultant reduction in the overall wage bill, reduce vehicle purchases and operating costs and purchase fewer — and more economical — vehicles, and reduce travel and accommodation costs.

"Local vendors might get paid by the government on time, and annual fiscal obligations to authorities could be met," said Robinson, who went on to question where the government came up with the $10 million amount for the referral program.

(Gov. Togiola Tulafono has stated publicly and Samoa News has reported that the $10 million was the number provided by the hospital earlier this year as part of its proposed supplemental appropriation bill for the current fiscal year.)

The Chamber leader also lashed out at the hospital, saying that LBJ over the years has been less than diligent in its management procedures. For example, he said "costs are unsustainably high and charges are unsustainably low."

Additionally, collection of its receivables appear to have been neglected previously and now stands at $14 million — from which a figure of $11.5 million is considered to be uncollectible, he said.

(Samoa News has reported that LBJ officials have testified in the Senate that the only collectable amount is around $2.5 million.)

And if it does not already exist, Robinson said, LBJ needs a comprehensive business plan to assist it in identifying an appropriate level and sources for its funding requirements.

"The implementation of controls for its operating expenses in order to run its business of providing an adequate and consistent level of health care to our community with a professional management team — that needs to ensure this happens," he said.

He told lawmakers that the local economy is fragile and any new taxes that are approved by the Fono will have a significant negative effect "on our small and struggling private sector and the community." Additionally, inflation will rise and there will be an increase in unemployment.

And without consultation with the private sector, the government is seeking to impose another level of taxes on businesses which, like all other cost increases, will be passed on to the community at a time when it can least afford it, he said.

"We are already an unattractive place for new foreign investment with our high minimum wage, high corporate taxes and high cost of public utilities and we should not add to these costs by introducing new levels of taxes and duties," he said.

"Let us not create more financial difficulties for voters in your electorates by approving a piece of legislation that will add to inflation and unemployment as a result of another layer of taxes on the business community which will be passed direct on to them," he said.

Robinson called on the House to develop another and more effective draft legislation for discussion without any increases in taxes, duties and charges so that a way can be found to assist the hospital with its financial needs and provide the level of health care that is has been mandated to provide for the community.

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