Time to unveil the mask!

The new government came to power with beautiful promises and unbreakable wows, numerous pledges and assurances for the nation.   One of their primary focuses for the fulfillment the promises have been to increase the revenue for the government. Very recently parliament has passed the bill to increase the import duty for number of items and the President has ratified the bill today (24 April 2014). To make the situation worse, communication services has been included as a taxable service. it is crucial to note here that, with import duty, GST (goods and service tax) has to be paid. This means double taxation for a single item.  

Progressive Party of Maldives is the ruling party of the Country and they have got the Majority of the new parliament with the help of coalition parties. It is with regret that i say as soon as they got the power, they have started to change what they have said during the election. For example first bill sent to the Parliament was the amendment bill to the President's Immunity and Privileges, which covers the household expenses of the president even he lives personal residence. This is a clear indication of priorities of the president. Instead of a bill beneficial for the whole public he hurried to pass to bill of his own interest. On other hand the bills which lead to collect more tax were also passed. Basically this clearly shows that more are taken from citizen and more are paid for the government officials.

Analysis

Increase in taxation creates more tears for the public and double taxation is sadly unfair phenomenon. The ultimate burden goes to consumers as Prices increase with double taxation. With the increment in prices, general price level raises which means having high inflation. Inflation reduces the purchasing power and leads to decline standard of living. Eventually, life of the common man becomes miserable. At the beginning Government introduced the GST as a substitution for the import duty but once again, as the policy renews and import duties are returned. This clearly shows we are walking backwards.

Have a look on remuneration of a civil servant. Half the nation consists of civil servants and the remuneration they receive is really low. But at this crucial point of time government is going to increase the revenue by taking extra taxes. There are more parliament members related or running resort business and they don’t like to increase the duty and taxes from the goods used by them. Hence duty are levied and increases from the goods that normal person uses. This is beginning of huge economic and social problems in the country.

Impact

Wealthy persons can live his normal life, nothing much will change for him. Poor people will suffer. This may leads to several social problems. Theft may increases. We have seen the economic crises around the World. Really wealthy nations once they run into economic disaster due to certain reason (most of the time due to bad decisions and actions from the government) they failed and have to face the crisis with dire measures. We don’t want to see such a misfortune in our beloved nation.

Recommendation

At present GST is the highest contributor to the government taxation system. Hence without trying to grab more from citizen, it is time to make citizen life easier. I strongly believe the Government needs to reform tax policy. Now tax burden are more for the poor and rich enjoying the wealthy life. We need to introduce progressive tax system. What is progressive tax? It is a tax to attempt to reduce the tax incidence of people with a lower ability-to-pay and high tax incidence to those with a higher ability-to-pay. 

This would be an alarming signal for who have voted in support of the present government at its initial stage. What we need is a caring government who are concerned about the well-being of general public instead of making laws to grab more. Government need to know the suffering of typical family. Government must try to minimize or avoid complains of the citizen. For that government needs to be clean and transparent. Have to be trust worthy. 

After Showing a masked face during the election and take off the mask once all the elections are over and show the real face afterwards would really scary. People have heard and believed the wows of politicians during election and their expectations are high. When our expectations are gone unfulfilled, the support for the government will definitely reduce. Wise men rectify their mistake before it is too late. To run a successful government, support of people is essential in a democracy. It doesn’t end by the time ruling party win the three consecutive elections. If the government official thinks like that it would be the biggest mistake they can make in their political life.