VAT, tax hikes: Short-sighted state policies to hurt people
The first decision, which raised taxes on more than a hundred products, is highly concerning for the general public. The current high level of inflation has already placed significant financial pressure on ordinary people, and increasing taxes in this context will create even more strain. As a result, market prices will rise, posing severe challenges for the poor and middle classes.
It is truly surprising and concerning that the current government is increasingly relying on indirect taxes to boost revenue. Indirect taxes generally burden the general population because they are directly linked to the price of goods or services, with the public bearing the entire cost. Particularly when inflation has reached alarming levels and people's purchasing power is decreasing, raising such taxes will make life even more difficult for the poor and middle class. However, if the government rethinks its revenue policy and takes steps to collect more taxes from the wealthy, it could be far more effective.
Currently, some wealthy individuals and companies evade taxes or enjoy various forms of tax relief. Despite selling high-priced goods and services, they are not adequately taxed on their income and wealth. This inequality erodes social justice and trust, harming the national economy. If the government took more stringent measures in tax enforcement and collected due taxes from evaders, it could significantly strengthen its revenue. Specifically, the government has a responsibility to investigate and take legal action against those who evade taxes illegally.
If the government reduced its reliance on indirect taxes and increased the collection of taxes from the wealthy through direct taxation, it could help create a more balanced and stable economy. Reducing economic inequality and promoting fairness in revenue management could bring long-term success to the government. However, if the government continues to rely heavily on indirect taxes, it will harm not only the common people but also the country's economic stability.
On the other hand, the decision to suspend the TCB truck sale programme is deeply concerning. This programme was an essential means of supplying affordable goods to the poor. At a time when inflation has reached critical levels and people's incomes are unstable, the government could have used this programme to provide much-needed assistance to the poor. Instead, the government's decision to suspend the programme contradicts the reality and needs of the people. By halting the TCB programme, the scope of assistance for the poor has been reduced, creating a stark disconnect between the government's economic policy and the needs of the public. This decision will not only make life more difficult for the poor but also undermine public trust and confidence in the government.
These decisions clearly demonstrate a lack of proper coordination between the government's monetary policy, revenue policy, and market management. The government should have taken effective measures to increase support for the poor and general population during this period of high inflation while ensuring market stability. Instead, the government has implemented harsher measures, which will only exacerbate the suffering of the people. Revising the revenue policy to avoid placing additional burdens on affected populations and focusing on increasing revenue by taxing the wealthy would have been a more prudent approach. Hopefully, the government will soon exercise sound judgment and make effective and positive decisions that align with the real needs of the people.
The author is the executive director of Sanem.
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