The prime minister devoted a substantial part of his State of the Nation address to justify the government’s recent tax hikes. And to discredit the “vocal few” who challenged the government’s ill-conceived tax policies. The prime minister:
Much has been said of the fiscal incentives and tax increases in certain areas. It has been alleged that the government is being insensitive to the difficulties that these will cause to our poor and ordinary businesspeople and that they will suffer the most. However, one should not allow oneself to be influenced without seeing the full picture. One needs to be also mindful that such opinions could be planted to influence public opinion in order to protect the interest of those who are in positions of power and influence. As this is a serious matter, I would like to explain it in some detail.
And so he explained, in great detail, that we enjoy some of the lowest tax rates in the world; that we must replace external development assistance with internal revenue; that the policies are pro-poor; that the tax hikes are not aimed at generating government revenue; that taxes were being increased for the public good in spite of the political risks; that doing what is popular would be unpatriotic; that the opposition to tax increases benefits the rich and influential; that ministers did not take a pay raise; that increasing taxes will prevent widening economic disparities and social ills; that taxes lead to environment friendly development; that the tax measures would develop a tax paying culture; and, finally, that paying taxes is about democracy.
Indeed, we may need to increase taxes. So taxes, per se, is not what I’m concerned about. Not at this time, at least.
What I am concerned about – and what the public outcry is generally about – is that the government did not follow the law, particularly the Constitution, when it recently revised the tax structure.
The debate is not about if taxes should be revised. It’s about how taxes should be revised.
In order to deflect the debate, the prime minister used the State of the Nation address to explain, at great length, why taxes had to be increased.
But that won’t do. I’ve already reported the matter in the National Assembly. And if the government refuses to review its decision, I may be compelled to report it to the Supreme Court.