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Hike in business license fees beefs up revenue collections

The ASG Treasury got a boost in revenue from business license fees during the first three-months of current fiscal year 2016, thanks mainly to a new law, which became effective June 15, 2015, and drastically hikes business license fees. The fee hikes were strongly opposed by the business community, led by the local Chamber of Commerce.


In its first quarter of FY 2016 performance report —Oct. 1-Dec. 31, 2015, the Commerce Department, which issues business license, said that based on information from Treasury’s Revenue Branch, receipts issued for paid business licenses numbered 1,971 business license renewals with total revenue collected of $280,027 — an increase of $125,777 or 81.54% compared to calendar year (CY) 2014 when $154,250 was collected.


Commerce director Keniseli Lafaele made clear in the report that the 1,971 business license renewal applications only represent about 52% of the CY 2015 business license applications of 3,813.


The Lolo Administration, which submitted the fee hike legislation, had said that the cost of a business licenses has remained the same for over 30 years and the number of businesses operating in American Samoa has grown significantly, creating ever increasing demands on the limited resources of the territory. In an analysis released early last year, DOC estimates that it costs the government $270.17 to process a business license.


The DOC in its 1st quarter performance report boasts of a positive business environment with an increase in business licenses issued. As of Dec. 29, 2015, a total of 3,813 business licenses were registered at the Treasury Revenue Branch, and this is an increase of 3.39% compared to 3,688 business licenses registered in the 4th quarter of FY 2015.


However, if compared to CY 2014 — with 4,678 — it’s a significant decrease of 18.49% or a decline in business activities of 760. “Thus, indicates a negative business activities growth,” the report notes.


DOC claims in the report that since the implementation of the 1-Day Process, the business licensing process has “become much more business friendly,” thus enabling several businesses to obtain licenses more easily.


The one-day initiative was implemented in 2013 when the Lolo Administration took office following long standing complaints over the years from the private sector that is takes too long to obtain a business license.




According to the new business license fee schedule, a beer tavern license is $300; retail stores $150; wholesale stores $150 per location; billiard and pool halls, per table $150; public dance hall $150; movie theater per location $300; beer importer $200; beer vendor $200; alcoholic beverage importer $1,500; alcoholic beverage vendor $1,500; garage and repair shop $150; and all other business, professions, agencies or activities $150.