The Cabinet has officially endorsed the long-awaited restructuring of the Ministry of Customs and Revenue (M.C.R.), a move that follows extensive discussions and deliberations that have taken place since 2023. 

Under the new structure, the M.C.R. will be divided into two distinct ministries: the Ministry of Revenue and the Ministry of Customs. 

This restructuring was confirmed by the Minister of Customs and Revenue, Tuala Iosefo Ponifasio, who also serves as the Deputy Prime Minister in response to questions from this newspaper. 

The Ministry of Revenue will focus primarily on domestic tax matters, a responsibility currently managed by the Inland Revenue Service. 

In contrast, the Ministry of Customs will take on the critical roles of managing import duties, and taxes, and overseeing border management and trade facilitation.

The rationale behind this decision outlines several key factors that have prompted the restructuring.

The scope of work for both offices has changed substantially since the merger in 2003. A lot has happened since then, with Samoa signing up to several international conventions and becoming a member of a growing number of regional and international organisations. 

One of the main reasons for the split, according to a statement from the Commissioner of M.C.R., Fonoti Talaitupu Li'a-Taefu, is the need to improve service delivery.

She explained that having separate Ministries means that each Chief Executive Officer (C.E.O.) can focus on timely decision-making and resolutions of emerging issues. 

Furthermore, she noted that while revenue collection remains a priority, it is no longer the only focus of the Ministry. 

"It is high time that we start focusing on the other border management and trade facilitation missions."

The restructuring also reflects the growing importance of border security and the need to address social issues such as the trafficking of drugs, arms, and ammunition. "Concerns on social issues concerning drugs, arms, and ammunition should become a focal part of Customs' work," Fonoti emphasised. 

The statement also noted that the C.E.O. in charge of Customs will dedicate attention to these critical areas, which have become a priority in light of rising global concerns.

The restructuring also aims to capitalise on the technological advancements introduced in recent years. The Ministry of Revenue and the Ministry of Customs have introduced new equipment and systems to aid their operations. "It is important that we develop the skill set of our staff to put these to good use."

 With these new systems, the ministries hope to improve compliance levels and allow staff to focus more on post-enforcement activities. Fonoti stressed that the utilisation of these tools would enhance the enforcement process and further support the ministries' missions.

Although the restructuring promises significant benefits, it will not be an instantaneous process. 

"This split will not occur overnight," Fonoti acknowledged, noting that changes in any organisation often come with challenges, particularly when it comes to staff adaptation. The Ministry's management is prepared to focus on the risks associated with staff reception and the broader challenges of implementing change.

A transition plan is currently in development, which will outline prioritised changes starting in the next financial year and continuing over the following years. She pointed out that while some positions may be phased out, the restructuring also brings positive opportunities.

 "Although a few positions will be traded off, the opportunities from new positions, as a result, are a positive move for the Ministry," she said.

The restructuring is seen as a vital step in revitalising the two ministries. 

Tuala stated, “This is a revitalisation step for the two Ministries to move forward with an improved tax regime. Each ministry can focus on its mandate.” 

He highlighted that the changes are designed to align the ministries with global and domestic tax development trends, particularly with the Inland Revenue Service’s upcoming system upgrade.

Furthermore, the Ministry of Customs will be better positioned to address the rising drug problem in Samoa, with an emphasis on developing the right skills, equipment, and personnel. 

“It also equips Customs to emphasise developing the right people, skills and equipment to tackle the rising drug problem in Samoa,” Tuala added.

The restructuring aims to address modern tax challenges and build capacity within the government to manage these systems effectively. “Each ministry is highly specialised and highly regulated to ensure fairness in dealing with taxpayers,” Tuala explained. 

He further noted that the overarching goal of the restructuring is to improve system efficiency, increase revenue collection, and introduce new revenue streams to strengthen Samoa’s fiscal health.