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Star Kist seeks lower corporate taxes
Friday,
May 2, 2008
Star Kist Samoa wants ASG to lower the tax rates it’s now paying on profits made from its local tuna canning plant.
It is proposing a special one-year tax structure, as its current tax exemption agreement comes to an end. Mary Sestric of Delmonte Seafoods says the proposed agreement would make it possible for Star Kist to remain in business at the highest, although likely reduced operations it can economically justify while Congress continues to deliberate on the annual wage increases provided under the current minimum wage law. Star Kist is proposing that it pay 20% on profits of up to $5 million, 10% for income of between $5 and $10 million and 5% for profits over $10 million. Star Kist tax exemptions are tied to employment levels and investment in its infrastructure. Under the new proposal the cannery says it can only agree to a required tonnage of 238 tons per day and 1485 employees, this is a reductions from the current required production level of 450 tons per day and 2,520 employees.
And unlike previous agreements where Star Kist commits to make capital improvement investments, the cannery says it cannot agree to capital investments on its plant as part of the tax negotiations. Sestric said that the proposed tax structure is in addition to the cost cutting measures already announced. She said the tax rate would be reflective of the tax structure already provided to other businesses in the territory as well as the deteriorating competitive situation of the American Samoa economy. Star Kist employees have already been informed about the discontinuation of free bus service if the next 50-cent increase in local wages goes ahead. General Manger of Samoa Packing William Martins said that the cannery has no comments to make at this time. Samoa Packing employees say there have not been any announcements about reduced hours or changes in employee benefits.
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