Samoa explores formalizing informal businesses through tax reforms

Samoa’s Ministry of Revenue is investigating strategies to integrate informal businesses into the formal economy. During the 46th Commonwealth Association of Tax Administrators (CATA) Annual Heads Meeting and Technical Conference in Arusha, Tanzania, Ministry officials presented approaches to encourage formalization.

Proposed methods include simplified business registration, increased taxpayer education, digitalization, enhanced cooperation between government agencies, and risk-based enforcement. While the Ministry views these initiatives as tools for business development and improved compliance, the move raises concerns regarding the livelihoods of small-scale traders, roadside vendors, and home-based producers who rely on informal economic activities.

Research from the International Centre for Taxation and Development suggests that the impact of increased tax official visibility varies by region. In wealthier, integrated areas, such outreach can strengthen trust and compliance, whereas in poorer or marginalized regions, the presence of officials may reduce trust and lower tax payments.