The Ministry of Revenue’s participation in an international tax conference has drawn attention to its interest in bringing informal businesses into the formal economy, raising questions about the implications for small traders and families who depend on informal economic activities.
Samoa’s Minister of Revenue, Hon. Pauga Teomatavui Talalelei Pauga, and the Ministry’s Chief Executive Officer, Fuimaono Vaitolo Ofoia, travelled to Arusha, Tanzania, to participate in the 46th Commonwealth Association of Tax Administrators (CATA) Annual Heads Meeting and Technical Conference, held from 5 to 9 October 2026.
The five-day conference brought together tax officials from Commonwealth countries to discuss technological developments, tax compliance, international cooperation and more effective revenue collection.
According to a statement issued by Samoa’s Ministry of Revenue, one of the country’s contributions was a presentation by Fuimaono examining how informal businesses could be encouraged to enter the formal economy.
The Ministry identified simplified business registration, taxpayer education, digitalisation, cooperation between government agencies and risk-based enforcement as possible approaches.
While the Ministry described these initiatives as ways to support business development and improve compliance, the proposals raise questions about their practical application in Samoa, where many families depend on small-scale trading and informal economic activities for their livelihoods.
What Does Formalisation Mean for Ordinary Samoans?
Informal businesses can include roadside vendors, market sellers, small food producers, independent tradespeople and people operating income-generating activities from their homes.
In Samoa, these activities often exist alongside subsistence farming, fishing and traditional systems of family and community support.
A family may grow taro or bananas primarily for household consumption, sell surplus produce when money is needed, and share part of its harvest with relatives or the wider village.
Such activities can provide essential financial support without operating in the same manner as a conventional commercial enterprise.
Formalisation generally involves bringing economic activities within government registration, recordkeeping and taxation arrangements.
However, the Ministry has not explained whether its proposed approaches would specifically target roadside vendors, occasional market sellers or families selling surplus agricultural produce.
There is also an important distinction between bringing someone into the formal tax system and requiring that person to pay additional tax.
Under the Ministry’s published tax guidance, compulsory registration for Samoa’s 15% Value Added Goods and Services Tax (VAGST) generally applies to businesses with annual turnover exceeding SAT $130,000.
The Ministry also publishes an annual business licence fee of SAT $282 per activity for sole traders and partnerships.
Business licensing requirements already exist under Samoa’s Business Licences Act 1998. Formalisation is therefore not necessarily a proposal for a new tax, but it could involve increased registration and compliance among people currently operating outside those arrangements.
The application of licensing requirements and any exemptions for very small or occasional traders needs to be clarified.
For someone earning a modest income from selling produce or prepared food, registration costs and administrative obligations can be significant even where little or no income tax is payable.
The question is whether formalisation would provide meaningful economic benefits to these families or introduce additional obligations into activities that currently support their basic needs.
What Else Was Discussed in Tanzania?
According to the conference organisers and the Pacific Islands Tax Administrators Association, the programme extended beyond Samoa’s informal-sector presentation.
Discussions included artificial intelligence, digital taxation, electronic administrative systems, support for small and medium-sized enterprises, trade facilitation, international cooperation and the use of technology to improve compliance.
Digital systems, for example, could help reduce paperwork, improve taxpayer services and make it easier for businesses to meet their obligations.
The conference also provided opportunities to examine the experiences of other countries in modernising tax administration.
The Ministry’s statement, however, did not explain which specific approaches Samoa intends to adopt, whether additional technical assistance will follow, or how any lessons from the conference will be applied locally.
Samoa’s Wider Revenue Collection Plans
The Tanzania discussions also come at a time when Samoa is seeking to increase government revenue through stronger tax administration.
In the Government’s 2026/27 Budget Address, taxation revenue was projected to increase by 17%, supported partly by improved compliance and enforcement measures.
The government maintained existing income tax and VAGST rates, while outlining measures intended to strengthen revenue collection.
This provides an important policy context for the Ministry’s interest in the informal economy.
Improving compliance among existing taxpayers and broadening participation in the formal economy are different measures, and the Ministry has not established that the latter will involve new taxes on small vendors.
Nevertheless, any expansion of registration and reporting obligations should be assessed against the economic circumstances of those affected.
The experiences of larger registered businesses do not necessarily reflect those of village households that earn occasional income from agricultural produce, fishing, handicrafts or food sales.
For many Samoan families, selling food or produce is an essential means of meeting household expenses, rather than an enterprise established for commercial expansion.
The Ministry has emphasised that formalisation should support business growth and create a fairer and more sustainable revenue system.
Whether this approach will improve the livelihoods of smaller operators will depend on how the government distinguishes commercial businesses from informal household activities, what obligations it introduces and what practical benefits those affected will receive.
