The House of Representatives in American Samoa has approved the Administration Bill which would establish a one per cent alternative minimum business tax.
The vote was 14-3 in the House but the bill still needs to pass the Senate before it becomes law.
According to the government's Revenue Task Force, only 13 per cent of businesses have been faithfully paying taxes and contributing to the territory's economy.
The task force said the rest only report losses but were still operating after many years.
Those are the businesses which this new tax would target.
However, business owners said the tax would be detrimental to efforts to establish new companies and attract investors.