Samoa Releases 2017-18 Budget Focused On 'Equity And Fairness'

Deficit of $35 million projected

By Joyetter Feagaimaali’i-Luamanu

APIA, Samoa (Samoa Observer, May 31, 2017) – Equity and fairness.

These are the guiding words for the Minister of Finance, Sili Epa Tuioti’s Budget for 2017/2018 tabled in Parliament yesterday.

With estimated revenues of $852.3million [US$330.5 million] and total expenditures of $934.2m [US$362.3 million], a Deficit $89.9m [US$34.9 million] is forecasted. 

“This Budget is about making the right choices to secure a better tomorrow,” Minister Sili Epa told Parliament. 

“These choices must be based on the principles of equity and fairness. "

“We must choose to focus on growing our economy to provide more jobs and build a solid foundation for a better quality of life for everyone." 

“We must choose to contribute to financing our development in a fair and equitable way. We must choose to guarantee the essential services that all Samoans demand."

“These are the principles that shape the Equity and Fairness theme of this budget. Every eligible person should contribute to the development of our country. At the same time the fruits of our development must be shared across to benefit everyone.”

Education and Health remain the priority.

The Ministry of Education, Sports and Culture gets the highest budget allocation of $100.3million [US$38.9 million], which is equivalent to 19.6per cent of total government expenditure.

The second highest budget allocation is $88.5million [US34.3 million] for the Health sector.

Infrastructure is allocated $46.99 million [US$18.22 million] while Tourism gets $11.4million [US$4.4 million].

Commerce is allocated $7.7million [US$3.0 million] while Agriculture and Fisheries is appropriated $14.1 million [US$5.5 million]. $15.35million [US$5.95 million] has been set aside as Unforeseen expenditure.

In his address, Sili noted the intention to review the public service to lift its performance and responsiveness to the delivery of efficient quality services required by our people. 

He points to the productivity dividend, saying they have been able to implement it without any compromise on the services being provided which suggests that efficiency gains have been achieved in the way Ministries have spent their budgets. 

He added that the economy has continued to perform well in recent years.

The budget’s recommendations are strengthening compliance with existing tax requirements, including compliance by taxpayers and improving the effectiveness of the revenue collecting agencies, including the Ministry for Revenue. 

“Removing a number of exemptions and concessions to improve the equity of the tax system.  

“Increasing non-tax fees and charges and indexing these fees and charges to ensure that the revenue raised more accurately reflects the costs of providing the services to which these fees and charges relate. 

“Increasing a number of duty and excise rates and introducing an equalization charge on EPC; and introducing a Telecommunications levy.  

The Government is also recommending changes in current taxation arrangements designed to ease the income tax burden on lower paid employees and sole traders; and lower export taxes and some duty and excise rates to support the competitiveness of Samoan businesses. 

Sili says the anticipated revenue gains from this package of reforms are estimated to be $14.1 million [US$5.5 million] in 2017/18, increasing to $30.6 million [US$11.9 million] in 2020/21.

“The Review recommendations strike the right balance between raising the revenue we need to continue to strengthen and improve the services and infrastructure which Samoans rightfully expect, but at the same time recognizing that we need to ensure we do not place an unreasonable burden on taxpayers or prejudice business growth and hence employment opportunities. 

“The findings also highlighted what we have known for some time. 

“Not everyone has been paying their fair share. 

“By removing concessions for which there is no clear justification, and strengthening our compliance mechanisms we can raise additional revenue without increasing the tax burden on ordinary taxpayers.

 “In fact, by doing these things we can provide some modest but important and no doubt welcome tax relief for our lower paid citizens.” 

Samoa Observer
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