Allegations surface regarding fake invoices for beer shipments

Although there are allegations of a beer importer bringing in large shipments of beer that don’t match the invoice, Treasurer Uelinitone Tonumaipea told a House committee there is no proof, or evidence.

Deputy Treasurer for Revenue, Keith Gebauer added that an investigation by Customs was carried out but and they found no evidence to support such allegations, and it's not uncommon when one company makes a complaint against another.

The allegations surfaced during Tuesday’s House Ways and Means Committee hearing on an administration bill which makes several amendments to current tax laws — such as gradually repealing the 5% miscellaneous tax, creating a new tax on sugary non-carbonated drinks, and changing the way an excise tax is levied on imported beer.

One of the questions raised by the committee at the outset of the hearing is why the government, through the ASG Revenue Task Force, sought to change the excise tax on imported beer from 190% of the value, to 35-cents per 12 fluid ounces, or fraction thereof.

Tonumaipea, who is also the task force vice chairman, said a business had brought in large quantities of beer but the invoices or “receipts” didn’t match the amount of beer imported. He added that the company that imported the beer had made up their own receipts — according to allegations.

Rep. Fagaoatua Dorian Salave’a quickly asked, “Has that been proven or was there evidence it happened — fraudulent receipts?” to which Tonumaipe’a said, “not... not fraudulent”, but he didn’t identify the name of the beer importer involved in the allegations.

Tonumaipe’a’s revelation prompted more questions from lawmakers, who wanted to know what is ASG going to do to prevent this problem from occurring. There was also a call from lawmakers for Treasury to provide information to the House for lawmakers’ review of any copies of any report pertaining to the allegations, which they say are very serious, but Tonumaipe’a said there is no evidence or proof of such claims.

However, that didn’t stop some committee members, who insisted that information on such allegations should be provided to the House for their review.

House Vice Speaker Fetu Fetui Jr., asked, “Have you identified any fraudulent activities at the port when it comes to receipts?” and Tonumaipe’a replied, “not at the port”.

The Treasurer claims that there have been questions raised by the public and Customs looked into it, as the price of certain beer brands are notably different from others. He said the claim was thoroughly researched by Customs, and the task force thought the only way to resolve this problem is to impose the tax by volume — 35 cents per can — which evens the playing field for all beer importers.

Fetui noted that there have been reports, which have reached him “on possible fraudulent receipts” and pointed out that the government should do everything possible to prevent these types of problems from occurring, as it impacts revenue collections and it is unfair to other businesses.

He also said he had recently sent his son (who is over 21 years old) to the store to buy beer for his workers. To his surprise, his son returned with information that a can of beer cost $1.00.

Fetui said he wondered how and why it’s $1 per can, but he didn’t reveal the beer brand or the store where the beer was purchased.

Both Tonumaipe’a and Gebauer confirmed to the committee that the proposed amendment on how beer tax is imposed will not result in the government collecting more revenue, but levels the playing field for all businesses.

Rep. Samuel Meleisea said, “For the record, we are not targeting a specific company” as the reason for the change in the way the beer tax is imposed.

“Am I right?” Meleisea asked, to which Gebauer replied, “that’s correct”, adding that it “isn’t uncommon... where one company will make allegations versus another company, of operating unfairly.”

Gebauer, who is also a task force member, said, “And the government takes every allegation seriously. There are some that we cannot pursue based on the nature of the allegations, there are others that we do.”

As to the allegation of ‘fraudulent invoices’ that came up during the committee hearing, Gebauer said, “We did a full investigation. Prior to my joining the Treasury/ Customs they had conducted one and another after that. And we found no evidence that showed any kind of impropriety regarding the invoices, regarding what was declared.”

In an Aug. 18th letter to several lawmakers, G.H.C Reid & Company voiced its support of the proposal to change how the government imposes the import tax on beer — based on volume, not on value.

GHC Reid said using per 12 ounce, instead of invoice cost, allows “even tax calculation for all beer products; avoids fraudulent invoicing; [and] aligns our tax calculation to the global community.” (See yesterday’s Samoa News edition for details).