APIA, 10 APRIL 2017 (SAMOA OBSERVER) —- Samoan  Minister of Finance, Sili Epa Tuioti, has set the record straight in response to claims that the government is “broke.”

The claim has surfaced after the government revealed its plans to review tax laws with the view of increasing the Value Added Goods and Services Tax (VAGST) – among other taxes – to shore up its coffers. But the suggestion that the government is broke was rejected by Sili.  


“I don’t know how you got to that,” Sili said.

“The reason why we are looking at increasing taxation is really not because we don’t have the money. There is so much demand for roads and water supply. If you have been listening to Parliament then there is a high demand for water supply, road access.”

“As you know we are also now increasing the funding of free education which New Zealand had provided money for. Over time the shares of that funding, has decreased so the government has to pick up from there. So really, if we don’t raise taxes, or borrow, where is that going to get us?

“It’s just going to take our economic development back but we are not broke.”

Sili said the government has sufficient monies for its plans.

But he admits that they need to prudent with spending and consolidate on cost cutting reforms.

“We need to review our expenditures. We did promise that we’ll be reviewing our expenditures in health and education sectors.

“We just have to make sure that we are spending them on the right areas and we are getting value for that money. It’s the same with all of our expenditures.”

Asked about the tax review, the Minister said it is necessary.

“It is something we need to look into after a couple of years, rather than waiting until things are really bad. I think it’s a very responsible move by government to do a review.

“You know when we review it does not necessary mean that there will be an increase, we may need to rebalance and reset to make sure we continue to provide the enabling environment for private sectors to reinvest in the economy, and to provide jobs.

“We are continuing to look at investing in health and education to make sure that everyone has access to education and health and to improve the quality of the services we provide.”

Minister Sili was also asked about Samoa’s foreign debt, and whether it is true it has reached the $2billion tala (US$744 million) mark. The Minister would not confirm or deny the figure.

But he said: “Our foreign debt is now about 52-53 percent of our GDP I think we need to make a point that historically our public debt as the percentage of our GDP is much lower than that, maybe 30 per cent.

“But you know when we have natural disasters like the tsunami, flooding, and cyclones and obviously we need to borrow from the World Bank, ADB to rebuild our infrastructure because if we don’t, then it obviously it going to impact on the growth of the economy.”

Sili said nobody could plan when natural disasters strike.  But when they do, they come at a cost….. PACNEWS [/restrict]