Senate VP clarifies that the Treasurer can permit partial payments on excise taxes for imported vehicles

Pago Pago, AMERICAN SAMOA — During a Senate hearing yesterday morning, Magalei Logovi’i, the Vice President of the Senate, emphasized the authority granted to the Treasurer under the Administrative Code regarding Customs. He clarified that the Treasurer has the ability to permit companies and individual members of the public to make partial payments on excise taxes for vehicles imported from offshore sources.

Those who attended the Senate hearing included Acting Treasurer Bret Butler, Deputy Treasurer Levi Reese, and Chief of Customs, Juliano Falaniko.

Senate VP Magalei detailed that for businesses, the requirement is to pay 25 percent of the assessed excise taxes, while the general public is obligated to pay 10 percent, calculated based on the vehicle's declared value. He highlighted that the current list of outstanding taxes on vehicles dates back to 2017, indicating a significant backlog in tax collection.

Despite this provision for partial payments, Magalei stressed that vehicles cannot be released from customs until the excise taxes are paid in full. He pointed out that the law is unambiguous on this issue, stating that there are records indicating certain vehicles were released even though their excise tax obligations were not fully satisfied.

Chief of Customs Falaniko added context by stating that the vehicles in question predate his appointment as Chief Customs Officer. He clarified that decisions regarding the release of vehicles are made by the Treasurer, and not by Customs staff, which may have contributed to the discrepancies noted in the report.

Senator Togiola Tulafono raised serious concerns over inconsistencies highlighted in the Customs Office report. He especially noted that the excise tax reported for a 2019 Ford Ranger stood at $3,209, leading him to question the accuracy of the valuation assessment used to determine that figure.

Togiola inquired about the methodology employed by Customs to establish the vehicle's value for tax assessment, suggesting that the agency may be relying on the shipping invoice rather than the vehicle's fair market price. This practice raises ethical concerns, as it could be perceived as an attempt to minimize tax liabilities, which teeters on the edge of fraud.

Furthermore, Togiola pointed out that numerous vehicles continue to be released without the full payment of applicable excise taxes. He acknowledged that while some individuals fulfill their tax obligations, there are cases where vehicles are released immediately upon their arrival without any payment being made, and in some instances, this has continued for years.

He expressed concern that the Treasury Office is not adequately monitoring these outstanding payments, resulting in a lack of accountability.

In addition, Togiola sought clarification on the nature of the agreements between the Customs Office and individuals making payment arrangements, specifically inquiring about the provisions outlined in these agreements.

As Falaniko prepared to address these questions, Senate President Tuaolo Manaia Fruean moved to conduct the remainder of the hearing behind closed doors, invoking the Privacy Act to safeguard the identities of individuals and businesses involved in the proceedings. This motion was supported by Senator Gaoteote Tofau Palaie.

In response, Senator Togiola cautioned against the potential ramifications of holding a closed-door session. While he recognized the importance of maintaining confidentiality for certain documents, particularly in relation to the individuals involved, he argued that transparency is vital in public hearings. Conducting proceedings behind closed doors could set a troubling precedent that might undermine public trust in the legislative process.

He stressed that although the senators have access to the lists containing names, the government is responsible for ensuring that such sensitive information is appropriately redacted before being presented. Togiola indicated that the Treasury should have consulted with its legal team to determine the proper approach for disclosing this information.

Togiola urged his fellow senators to adhere to Senate Standing Policies and continue the hearing as a public session rather than transitioning into a private one.

Senate President Tuaolo acknowledged the validity of Togiola's concerns, yet reiterated that senators need to be privy to information regarding businesses that owe excise taxes, a detail that cannot be disclosed openly. He then sought the legal counsel's opinion on how to navigate these conflicting interests.

Senator Muagututi’a Tauoa took the opportunity to voice his perspective, urging the Senate to act judiciously. He expressed support for the Senate President’s position, emphasizing the need to expose those businesses that fall short of their tax obligations. Muagututi’a articulated a vision of honest governance, reminding his colleagues of the long-term consequences for future generations.

Togiola reiterated that there is no intention to conceal the identities of the involved parties. However, he maintained that the confidentiality of this information must be respected and is ultimately the government's responsibility.

As a senator, Togiola stated that he cannot remain passive when the rights of the people are potentially at risk, which is why he opposes relegating these matters to closed-door discussions.

He asserted that senators should be able to ask probing questions without compromising the anonymity of businesses or the public, emphasizing that there is no underlying agenda behind the push for transparency in this hearing.

The Senate's Legal Counsel, Mitzie Jessop Ta'ase, weighed in, noting that while most government reports are categorized as public information, this specific report has yet to undergo validation for accuracy by the Senate. She emphasized the existence of discrepancies that require further examination.

Senate President Tuaolo concluded by expressing profound concern over the persistent issues stemming from the Customs Division's inability to fulfill its responsibilities effectively.

He highlighted the serious implications of this inadequacy, particularly questioning the specific legal provisions that grant the Treasurer the unilateral power to waive complete payment of excise taxes.

Furthermore, Tuaolo raised critical issues regarding the authority to release imported goods without ensuring that all tax obligations have been fulfilled, underscoring the need for a thorough review of the existing processes.