Cigarette tax hike proposed in American Samoa

A three cent hike in the tax on cigarettes, cigars and tobacco has been proposed in American Samoa.

The Governor Lolo Moliga said smoking related health risks pose a threat to residents and tobacco taxes are a proven strategy to reduce smoking.

He also said the health risks and consequences of smoking raise the overall health care spending in the territory and place a tremendous burden on its fiscal resources.

The additional tax is earmarked for helping to fund the American Samoa Community College.

Lolo said while the new tax was a burden it would help provide secure funding for the college and more educational opportunities for young people.

At present there’s a 30 cent tax on cigarettes and cigars and on every 10 grams of tobacco.

Current law has 50 percent of the tax deposited in the General Fund for appropriation by the legislature and the balance goes towards the American Samoa Economic Development Authority bond repayment.

According to the proposed bill, only 41 percent of the tobacco tax will be deposited in the General Fund while nine percent would go to the operation of the American Samoa Community College.

There’s no change in the portion earmaked for repayment of the bonds.

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