Acknowledging people's contribution before tax hikes
A couple of days back while I was reading a daily, one news caught my eye about the Indian president Ram Nath Kovind cancelling all Iftar parties at Raisina Hill to avoid wasting money of the taxpayers, namely the people. True it is that almost all the expenses of government ministers, service-holders including development projects are dominantly financed by taxpayers. Thus similar utterances, that of Mr Kovind, have been heard from many other government heads in other countries. Unfortunately none of them however is Bangladeshi. It seems that tax is not paid in this country by people.
The recently proposed budget for the fiscal year 2018-19 is still in the talks of the town. Attention has been drawn to nothing else then tax reforms. While it was proposed that the Finance Minister should expand the tax net to better ensure sustenance of the economy, it was also expected that the government would rather chose to avoid this option and on the contrary increase rates of persisting taxes.
It was also expected that such would be done in a way that the tycoons of the economy would not be bothered much. As such the other contributors of the economy, nominally the majority would have to pay to fill up the gap. And this, in reality, has become the issue, as taxes the more indirect ones have been increased targeting the lower-income and middle-income categories.
One salient fact is that apart from supporting the garments industry and remittances the lower-income earners have been for long contributing to pile up revenues. They along with middle-income earners have made the single most contributions in almost all the infrastructure development projects we are seeing or are about to see. But unfortunately, their contributions have not been quiet acknowledged by the government, the party that collects and uses cash. On the other hand the registration fees of residential apartments below 1000sft have been increased by 4 per cent in the new budget while the same rate for flats beyond 2500sft landmark have been decreased and fixed at 2 per cent. Guess the indirect taxes are not the only ones that would target the middle-incomes in the coming days.
Many are blaming the government for increasing taxes that would ultimately hurt the general mass and not the ambitious capitalists. In my opinion, the reason lies in the fact that the government is perhaps like most of the governments in our history quite unaware of people's contributions through taxes, or at least it is not ready to accept this contribution. There might be another covert reason behind this -- taking credit for all the development projects singularly for the government.
But the people who pay taxes directly or indirectly do not only hold the identity of 'taxpayers' by virtue of paying taxes with patience at whatever rate the government fixes them. They are rather financer of governments, salary providers of government officials and ministers and also their entertainment facilitators. All the foreign trips, research institutes whether they strive to serve their purposes or not are also provided for by the taxpayers.
Even the public universities the harbingers of future ministers, officers and also corporate heads are chiefly financed by people's taxes. Our government has few sources of its own other than taxes and foreign donations unlike many developing and developed countries. Governments in many of these countries have enough firms, factories, institutes to cater chiefly for their own needs. Still they acknowledge people's contributions whenever it is suited.
But in our country even though the government offices are run by taxpayers, due to some misfortune all their contributions do not get proper notation. Almost all the government financial institutions, research institutes are burdensome for the government, provide little or no return and again rather depend on 'people's taxes.' Many of these institutes, faculties instead of providing fruitful outcomes for the nation have even become favourite tender-business and employment destinations for ruling party activists often bypassing all institutional regularities.
Granted that some of the sources of tax expenditure like the cash-intensive development projects many of which are now on cards like the Metrorail, Karnaphuli Tunnel etc are primarily drafted to boost people's living standards and thus government reserves the right to make people pay (not sure whether they take opinions or permissions before doing that), their contributions in these cases are also not noted.
Government can take pride in itself if it wants when it comes to implementing development projects for doing all the organising, field studies etc. But unfortunately in this regard government and their patronised institutes have also failed for not providing with enough experts. Thus they have to invite foreign nationals at higher cost, facilitated by taxpayers 'again'. Many of these projects are titled after names that suit government's preference while people's toils behind them remain unaccounted for. The present government to some extent does acknowledge people's contributions for the collective growth of the economy. To outline its own contribution the government however reserves its sole claim on the aforementioned prospective development projects.
It might be added that in a briefing Prime Minister Theresa May acknowledged the part played by her people's taxes in promoting Britain as a source for humanitarian assistance fund worldwide. Even though all the painstaking tasks of selecting destination for spending, doing overall inspection are orchestrated by the government, May paid little attention to these facts. Governments here perhaps do not want to risk losing in elections and as such rely on the development projects entirely as their achievement.
This negligence towards people's hard-earned-money might be the most important factor, for which the governments take little care when they raise tax rates. If they would acknowledge people's contributions maybe they would be more careful when they raise tax rates, at least to minimise controversies and criticisms. What I have said thus far has stirred many a young mind. But the issue to my knowledge has not yet been raised to the level of public debate. The civil society when calls for a budget for bridging poor-rich gap should also focus on this issue.
The writer is with The Daily Observer