Tax Issues Loom Over American Samoan Startup Pago Wings

Pago Wings, an emerging airline in American Samoa, is facing legal challenges over an alleged failure to pay excise tax on its aircraft. This issue pertains to a Tecnam P2012, registered as N1202P (msn 056/US), which the start-up imported without reportedly meeting tax obligations. The Samoa Observer disclosed that during the Third Regular Session of the 38th Legislature, the American Samoa Government treasurer, Malemo Tausaga, highlighted the company’s non-compliance with the excise tax payment upon the aircraft’s arrival.

According to Tausaga, Pago Wings was required to pay the tax when N1202P arrived but failed to do so. FlightRadar24 ADS-B data indicates that the aircraft was ferried to Pago Pago on September 29, 2023. The situation raised questions among other members of the Legislature, particularly regarding the aircraft’s release without tax payment. Tausaga explained that it was a common practice for Customs to release items under payment plan arrangements, albeit without a formal legal framework supporting such actions.

Furthermore, Pago Wings has been actively preparing for operations, conducting test flights earlier this month in anticipation of starting charter services before obtaining certification for scheduled passenger flights.

Senator Magalei Logovii added another layer to the controversy by informing the Legislature of allegations that Pago Wings failed to obtain the necessary customs clearance in Hawaii before flying the Tecnam to American Samoa. He also mentioned that the aircraft reportedly arrived without the required FAA documentation, although ch-aviation has not confirmed this claim. According to Logovii, local customs agents initially attempted to block the aircraft’s release due to unpaid excise tax but were eventually overruled.

FAA records show that N1202P is registered to Paramount Builders Inc, a construction business in Pago Pago owned by Papali’i Laulii Alofa. Paramount also holds registrations for two more Tecnam P2012s, N1203P (msn 057/US) and N1214P (msn 061/US), which are yet to arrive in American Samoa. N1203P is currently in Honolulu. Pago Wings is slated to operate under the control of Part 135 air carrier Pacific Air Charters, based in Honolulu.

These tax-related complications highlight the regulatory and financial challenges faced by aviation start-ups, particularly in navigating the intricacies of aircraft importation and taxation. The resolution of Pago Wings’ tax issue will be a critical step in its path towards launching operations in the region.