Government was coerced to reduce and remove taxes during the COVID-19 pandemic in order to initiate stimulus for the economy, claims National Federation Party (NFP) leader Prof Biman Prasad.
Prof Prasad said the 13 Bills passed in Parliament last week were really targeted at revenue generation and stimulus for the economy.
He said they had told Government in the past of the adverse effects of taxes on the country’s economy while their ideas fell on deaf ears.
“Concerns were raised about these taxes, a lot of the revenue measures that is now being changed, repealed and reduced will have a big impact on revenue collection and this is what we have warned Government on many occasions that it is not rightful to increase taxes,” he said.
“The timing is not necessarily good as some of this measures should have been done a long time ago.” Without looking at the details of the Amendment Bill for Tariff Act 1986, Prof Biman said no one would realise the major components of the budget.
“But when you look closer, at the least it is not really focusing on the underprivileged or the needy and the vulnerable,” he said.
Prof Biman claimed even though Government had removed duty on basic items like rice, flour, tea, garlic and medicine, people still had to pay 9 per cent VAT on these items.
He raised concerns on Government’s decision to increase fuel tax despite the plummeting global price of fuel. “While banks are giving reliefs to customers in the form of holiday repayments, deferring of payments, they have not reduced interests yet and they should be because the liquidity is increasing and banks are also holding back on lending in some ways,” he said.
In his right of reply Attorney-General Aiyaz Sayed-Khaiyum questioned Prof Biman’s claims adding the environment and climate adaptation levy (ECAL) taxes remained at 10 per cent and the service turnover tax remained consistent adding that they were the only Government to reduce VAT.
Mr Sayed-Khaiyum admitted they had increased alcohol duties, adding that NFP had intended to reduce duties on the item and lamb chops during election campaign.
He added they had reduced tariff on food items after wide consultation and that there has been wide reduction of duties in all sectors.
He said they needed to increase duty on fuel to improve revenue as Government needed to provide services and pay people.
“We have done this in the right time,” he said.
