Lawmakers in American Samoa have agreed to the final language of a proposed law, increasing tobacco excise tax by three cents and repealing the two percent wage tax.
Photo: 123RF
The final decision followed an-hour long debate by Fono Conference Committee.
Currently the tax is 33-cents per cigarette or cigar and for each 10 grams of smoking tobacco.
The Fono approved bill will increase the tax to 36 cents per item.
For the wage tax, paid by all earners in the territory, 50 percent of revenue collected is usually earmarked for operations of the LBJ Medical Center.
The other 50 percent supports the Off-Island Medical Referral Program.
However the final bill repeals the entire wage tax leaving the hospital to depend on annual local government subsidy of about $US3 million.
The hospital also gets federal funds for its operations and collect patient fees.
All revenue earned from the tobacco tax hike goes to the government's general fund for appropriation.
The legislation will now be sent to the governor for his review and decision.
If the bill is signed into law, store owners in the territory say it will hike the cost of a pack of cigarettes up to about $US14 a pack on the main island of Tutuila.
In the Manu'a island group, the cost could be closer to $US20 - because of the shipping costs.