A loophole? Corruption? Or both?

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Mata'afa Keni Lesa

Businessman Va’atuitui Apete Meredith has a legitimate point. 

It’s something the Government, especially the Ministry of Revenue and Liqour Board, and all the relevant authorities should investigate and take the necessary action with the idea of righting this wrong.

On the front page of your newspaper yesterday, businessman Va’atuitui sounded the warning in a story titled “Alcohol Bill could lead to local business losses.” He was addressing a recent consultative forum with the Ministry of Revenue (M.O.R.) when he raised the issue. 

And good on him for standing up and speaking out.

For the uninitiated, Va’atuitui in making his point bought two locally manufactured liquor, namely Boom Vodka and Rice Vodka. He pointed to the fact they each cost $26.50 tala and $28 tala respectively and yet the excise tax on the locally-produced liquor is $38 tala.

Now how on earth is that possible? This is absolutely ridiculous and something is definitely not right somewhere in this equation.

“How can the retailers meet their margins by selling at that price when the excise tax alone is $38 tala?” Va’atuitui asked.

 “When we talk about alcohol, let’s talk about leveling the playing field, when enforcement is carried out. I want to level the playing field.”

The playing field obviously has not been leveled. For a long time.

“Our business has been in operation for more than 20 years, and this is what it has come to, we’ve had to cease manufacturing,” he said. 

“I am stunned with the treatment. How can you say that you are carrying out your duties?”

Now let’s pause here for a moment. It’s hard not to feel for Va’atuitui and his predicament. For a company to fold under these circumstances after 20 years of hard slog, it’s absolutely heartbreaking. If this doesn’t ring the alarm bells, something is wrong with this country.

Keep in mind that it’s not just Va’atuitui’s business that has been affected. There are many other companies, locally owned at that too, that are going through the same struggles.

Which is ironic when we think about it. Folks, we are talking about a Government that is forever singing their own praises about creating a conducive environment for business and economic growth.

Well this environment is not conducive at all. If anything, it is killing businesses; especially the ones who want to do the right thing. 

The truth is this. It is not possible, business sense wise, to sustain a business when you sell a product for $26.50 when the excise tax alone is $38 tala. You don’t need to be a rocket scientist to know this is crazy. Any “idiot” or “fool” can see that this is wrong.

The sad thing about it is that it has been happening in Samoa for so long and it still continues to happen. It is getting worse with all these foreign companies entering and flooding the market with their products. Are these the types of foreign investors we want? 

Now who is fooling whom here? If members of the business community are upset and speaking out, can you blame them? They are the ones who have to put up with this nonsense? It’s their money, their hard-earned sweat. And don’t even tell us that this is the reality of competition. It is not.

Business competition is healthy. But it is not competition when certain companies are benefitting from a loophole, if you want to call it that, which clearly exists. The truth in this matter is clear to see. Someone is not paying their taxes somewhere. Or someone in a position of authority and power is turning a blind eye to wrong doing that will only hurt other members of the business community but also the general public.

At the public consultation, the Ministry of Revenue’s Solia Tanuvasa Kalolo, in response to the concerns expressed by Va’atuitui, said they did not have any control over liquor retail prices. He said the Liquor Board is investigating all liquor retailers. 

Well that’s good to hear. Let’s hope they tell us what comes from their investigation.

In the meantime, Va’atuitui insisted that the Ministry focus on the source of the problem, which are the liquor manufacturers, who are allegedly on-selling under the cost of the excise.

Former Chamber of Commerce and Industry chair, Mark Paul, supported Va’atuitui, adding that it should be easy for the Ministry as there are only a few local liquor makers in Samoa.

 Said Mr. Paul: “If the playing field is level and everyone pays the same tax to the government there will be no problem, but if there are competitors who are selling under the cost of the excise tax, that means that the ministry is not collecting the full excise tax. The problem is with the manufacturer – not the retailer.”

We couldn’t agree more. And you wonder why the Government is so desperately trying to tax everyone else in order to make up for this shortfall? 

What do you think?

Have a fabulous Friday Samoa, God bless!

© Samoa Observer 2016

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