13 Jan 2011

Tax hikes to hit American Samoa's poor hardest

6:27 am on 13 January 2011

A social service group in American Samoa says the governor's proposal for an increase in the minimum income tax is going to impact heavily on already struggling low-income earners.

The Governor Togiola Tulafono has announced a plan for a two-percent increase in the minimum income tax to stave off a reduction in work hours for government employees or cutting staff numbers.

The government needs to raise 7.2 million US dollars to avoid cuts and to make up for a revenue shortfall from reduced excise taxes, individual and corporate taxes.

The director of Catholic Social Services, Father Petelo Siliako, says they work with people who are already finding it difficult to make ends meet and their numbers are growing.

"I know they are greatly affected, because they ask a lot of questions, they voice their grievances, they make a lot of complaints and the Governor [is] just trying his best to make them understand the present situation because of this economic downturn. Yes, it really affects them."

Father Petelo Siliako says as most of their programmes are federally funded, he hopes their funding won't be cut.