There will be be no reduction in work hours for American Samoa government employees or a reduction in workforce, but the Governor is proposing a two-percent increase in the minimum income tax.
To avoid cuts, the government needs to raise 7.2 million US dollars to make up for a shortfall from reduced excise taxes, individual and corporate taxes.
Our correspondent, Monica Miller, says if a reduction in hours is necessary, it will be staggered based on how much people earn.
"What the Governor is proposing is to raise the minimum income tax, which is four percent of wages. He's proposing a two percent increase. At the same time, he said if the Fono goes along with a four percent hike, then that will give them enough money to recover from the 7.2 million dollar shortfall."
Monica Miller says Governer Togiola Tulafono believes most people won't notice a two-percent tax increase, because social security deductions were reduced by two percent only a short time ago.
The Governor also wants to assure businesses that despite its financial shortfall the government will pay all outstanding invoices for services rendered.
Our correspondent, Fili Sagapolutele, says the Governor has also arranged a meeting between the Treasurer and concerned vendors to sort out delayed payments.
What they are trying to stress out to the vendors is that all expenditures paid by federal grants will be paid out.
Fili Sagapolutele.
The governor says that the government is also owed more than five million US dollars by the local business community.
