Pago Pago, AMERICAN SAMOA — The FY2022 2nd Quarter Continuing Disclosure Report Updated and resubmitted  by the American Samoa Economic Development Authority (ASEDA) on May 19, 2022, for the FY ending September 30, 2021, as part of its requirement to bondholders of the 2015, 2018, and 2021 series, shows not only  the changing economic landscape of American Samoa through a breakdown of revenues the government (ASG) collected, over a period of 5 years, but also that ASG’s ongoing ability to pay the bonds is relying on a large extent to tax payers — corporate and personal.

The bonds, according to the report, are secured by revenues collected from corporate and personal income tax payers, as well as excise taxes and charges, and fees for services & goods collected by the government.

The report breaks down ASG’s collections into tables listed by fiscal year and types of revenues. The period spans 5 years — 2017 - 2021.

Three tables are shown — one citing “Revenues of Largest Corporate Income Tax Payers” that shows the percentage that each category of business or industry pays; another the “Historical Summary of Pledged Taxes” showing tax dollar amounts collected and earmarked; and, the third the “Historical Summary of Revenues” which lists a summary of revenues collected by ASG through taxes, licenses & permits, Intergovernmental, Charges for Services, Interdepartmental, and Miscellaneous.

REVENUES OF LARGEST CORPORATE INCOME TAX PAYERS

For Revenues of Largest Corporate Income Tax Payers by category, Canneries was the largest contributor in 2017-18.8%, followed by Petroleum- 14% and Technology 10.2%. The same pattern is repeated in 2018, with the Canneries and Petroleum 38.2% and 32.8% respectively. However, Technology no longer shows up and instead Retail becomes 3rd in line of the largest contributor with 14.9%.

However, in 2019 the trend changes, where Canneries become the 2nd largest contributor with 22.2% and Petroleum the largest with 24.6%, while Retail stays in 3rd place with 12.6%.

And in 2020, Autosales take over as the leading corporate contributor with 20.1%, significantly beating out Canneries- 12.5 %, Petroleum- 11.6% and Retail- 10.9%. The Restaurant/ FastFood category equals the Canneries contribution, while Insurance was up at 13.9% coming in 2nd to Autosales.

In 2021, the Canneries’ contribution falls to 9%, Petroleum rises to 16.9%, Retail reduces to 8% while Autosales continues as the number one contributor at 17.8%, with Wholesale revenues for the first time showing a double digit percentage of 11.1% for 3rd place, while Insurance drops to 4th place at 11%. Restaurant/ Fast Food in 2021 drops to 9.7%, but is still higher than the Canneries.

Local economic trends seem to show that the drop in Canneries and Petroleum contributions are probably due to the COVID-19 restrictions that saw the canneries shutting down for a while, with less driving happening due to COVID curfews for a Petroleum decrease that could also be due to world shortages causing delayed shipping, and rising gas prices.

People buying in bulk due to lockdowns and supply shortages is seen in Wholesales contributions, however puzzling is the Autosales category, which while dropping by around 3% in 2021, is still in the double digits from 2020. It would seem new vehicles were big in 2020 and 2021, which could be a reflection of the extra cash that flooded the local economy due to federal COVID money.

HISTORICAL SUMMARY OF PLEDGED TAXES

For the “Historical Summary of Pledged Taxes” listed by dollar amounts, the largest excise tax payers is the Tobacco category — with 2021 bringing in $16+ Million up from around $12 Million in 2017. From 2017 to 2021, the trend in this category was a continual rise in collections.

The Soda category is the only other one following the trend of the Tobacco category — that of a continual rise in excise taxes collected from 2017 to 2021, albeit ‘soda’ has never exceeded $3 Million over the 5-year period.

The pledged taxes noted from 2012 to 2021 as earmarked are: for Corporate Taxes- $1Mil each year; and, for Alcoholic Beverages, Motor Vehicles and 5% Excise Tax — these all vary in dollar amounts.

The earmarks are subtracted from Total Taxes, and the Military Cover Over Taxes are added to this total for a Total Net Taxes. The lowest total net taxes collected was in 2013 at $50Mil+ and the highest was in 2021 at $84.65Mil.

HISTORICAL SUMMARY OF REVENUES

For the “Historical Summary of Revenues” for the territory, FY 2013 is the lowest with $82Mil+ collected and FY 2021 is the highest with $111Mil+ collected.

The drop in FY 2013 is largely due to only around $54Mil collected in taxes (business & personal), indicating how ASG revenue collections depend on these taxes.

For example, in all other fiscal years, tax collections are listed at $60Mil+, culminating in FY 2021 that shows for the first time over $90Mil was collected. The exception is FY 2017, that shows a drop in revenues corresponding with a drop in taxes of around $4Mil.