letters

Lack of incentives have forced me out

CONTRARY to the remarks by bank officials reported in your article (August PIM, p. 41), Samoa does not offer incent ives equal to anywhere else in the islands.

Under the present Incentives Act, unless you are investing $1 million or more, or are starting a pioneer industry, or expanding a present industry which already has incentives, the in centives offered are hardly worth having. Furthermore, Samoa must almost stand alone in the world by offering no export incentives whatever.

Again, contrary to what was stated, Samoa does not encour age foreign investors but takes active steps to discourage them.

For example, the Development Bank, which has more funds for industrial development than it can use, restricts its lending to companies with a majority of foreign shareholding to a frac tion of what it can lend to Samoan-owned companies.

As a result of lack of incent ives coupled with crippling int erest rates of up to 21 per cent; heavily restricted credit; high tariffs on imported raw materials; penal taxation; mini mal protection and general in difference to their plight by government, local manufactur ers have been struggling to survive over the past few years.

And little or nothing has hap pened to change this with the recent change of government.

To take my case in particular, two years ago (admittedly on the advice of an Australian expert) the government intro duced an excise tax of 40 per cent on my tropical fruit wine and 60 per cent on our fruit liqueurs, perfume and aftershave lotion, all of which had a local input of about 80 per cent.

Two years later, as a result of the drastic price increase, we

have ceased production of per fumes and aftershave, liqueur sales have dwindled to almost nothing and wine sales are about half of what they were before the tax was introduced.

The winery turned around from a profit to a heavy loss, local growers have so far lost about $BOOO in fruit I would otherwise have used, and gov ernment got less revenue from income tax and excise tax com bined than they would have got from income tax alone.

The government knows all about this, but all I get is sympathy and promises. As a result, I am transferring most of the winery operation to Fiji where the government is light years ahead of Samoa when it comes to encouraging industry and investment.

In another of their apparent efforts to kill the goose that lays the golden egg, just as tourism seems about to take off in Samoa, the government, in an incredibly stupid move, has in

troduced a 10 per cent enter tainment tax on, among other things, hotel tariffs and meals.

Obviously, if I didn’t like the place and its people I wouldn’t have stayed here so long, but as a result of ultra-conservative banking policies totally in appropriate to a developing country such as Western Samoa, particularly by the Cen tral Bank and BNZ-directed Bank of Western Samoa, and misguided government policies, Western Samoa most be one of the most difficult and frustrating places in the world to do business.

We have promises by the Minister of Finance that everything is going to change for the better, but promises are the stock in trade of politicians, particularly ministers of finance.

Perhaps in a country founded on God we can expect miracles.

I hope so.

Bob Rankin

Apia, West Samoa