People Pay For Govt Mess

A minimum tax for threshold income or less! Why should people pay for your mess?

Govt made it compulsory to pay a minimum tax of Taka 2000 for every TIN holder. This is literally forcing the people to pay for its economic mismanagement. Back in 2016,I wrote this piece titled “Get Your Hands Off My Pocket”¹. Sharing it again:

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Small and medium entrepreneurs, comprising of mostly Dhaka’s shop owners, staged a Dhaka-wide complete shutdown of their shops as a token of protest against the imposition of additional VAT that they deem unjust. VAT threshold for shop owners was raised to Tk 28000, two times higher than what it was a year ago. Recently Finance Minister even wished to impose tax on the school-goers.

We Bengalis are emotional. Whenever working Bangladeshi’s salary becomes taxable, he/she spares no opportunity to become a new taxpayer. Every year people throng to income tax fair. Just this year around 36,853 new taxpayers get themselves registered in the tax fair. Moreover, 195,000 taxpayers paid around Tk 21.30 billion as income taxes. Apparently, a feel-good factor comes into play on such occasion. However, have we ever thought that our money is ending up in good hands?

Bangladesh’s tax-GDP ratio is 8.6% during the period of 2006-2008. During the same period on average $5 billion laundered abroad every year from Bangladesh. According to Global Financial Integrity report, around $9 billion capital flight took place in 2013. Guess who did that. Bad debts are piling up in banks due to flawed decisions taken by partisan management boards.

Do we see an improvement in law & order situation? Do we get better health services? Are our hospitals well equipped? Do we have quality roads, bridges and public office buildings? Is there an increase in education subsidy? Are our infrastructures good enough to attract domestic and foreign investment? Did we invest enough in political and constitutional institutions to ensure checks and balances and to protect our democratic rights? Does the private sector reap as much benefit as anticipated from the implementation of big infrastructure projects?

In terms of economic management, this government is guilty of dereliction of duty. Public confidence on government shattered as one after another financial scam hit the country. The last one, alleged hacking of Bangladesh Bank’s foreign reserve fund, put the Finance Minister (FM) and senior party leaders at odds with the Central bank’s governor and ended up in the resignation of the latter. Rampant corruption and plundering of public and specialized banks only filled party-men’s pocket. Consequently, people’s confidence to ruling party dwindled away to nothing.

But the FM’s comedy show continues. Recently at an event on remittance, FM expressed his desires to borrow money from central bank’s forex reserve to finance mega projects. The remark causes outpouring of concerns among some professionals as FM, to whom public bank’s stolen Tk8 billion is just “peanut”, took financial scam lightly.

To me, the idea of borrowing from forex reserve sounds like a blatant mockery in the wake of dilapidated condition of financial institutions. And only an FM who never took moral responsibility of any scam can make such heartless and senseless remark about Spartan people’s hard-earned money.

Does such a bad manager of economy have right to impose tax on us? Though the present government technically fit to run the country, a good number of voters did not vote in 2014 general election, boycotted by BNP alliance. In that light, it has lost moral high ground to implement any of its policies. Flawed political course of action by BNP alliance gave the present government an excuse to swell the number of political prisoners in overcrowded prisons, further undermining its organizational capacity. So, the government took an authoritarian stance and pursued anti-public economic policies with no hold barred. Utility fees were raised on several occasions while the oil price was all time low. Without any opinion poll, one can draw a bottom line that people were not happy with such decisions.

Ignoring parliament and without taking prior consent of people’s representatives this VAT raising move only increases resentment. Since the government lacks popular public support, individuals who are not on the same page can say: “Hey you did not care about my opinion. Why should I pay taxes at your whims?”

As soon as public resentment reaches to a crescendo, it may turn into a government changing movement.

Introduction of Magna Carta can be aptly cited here as an example. The elites under the king forced him to revoke some of his privileges and to accept Magna Carta that laid down that the King must consult them before raising taxes or imposing new ones.

In Bangladesh, we already witnessed few spontaneous protests by different professional groups despite effete state of the main opposition. Primary school teachers took to streets and had skirmishes with Police over their grievances. Public university teachers waged an abortive movement over pay hike. And private university students quite successfully made the government rescind its decision of imposing VAT on university fees.

Protests staged by professional groups should ring alarm bell all across the party hierarchy. People simply do not want to see their views and opinions getting crushed under authoritarian boots. They want to see govt policies reflect their wishes. Not just being guided by whimsical policies that they do not ask for. In functional democracies, rival political parties compete for people’s trust and formulate policies based on people’s desire.

Unfortunately, bitter rivalries between two leading parties hampered the proper functioning of democracy. We are left with no choice but to accept the status quo: a parliament where half of the MPs are uncontested.

Imposition or raising VAT and tax is crucial matter and demands consent of people’s representatives. Just slapping them on people like medieval rulers is like trampling on people’s feeling and wishes.

Until democracy gets back on track and a parliament is formed through a free and fair election, government should refrain from emptying people’s pocket by levying unjust and unreasonable VAT and duties. As long as government does not change its decision, people have every right to say:”Get your hands off my pocket. Why should I pay for your mismanagement?”

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Notes And References

1. ”Get Your Hands Off My Pocket”,Rezaul Hoque,November 11,2016. https://rezaulhoque.WordPress.com. For more read at https://rezaulhoque.wordpress.com/2016/11/11/get-your-hands-off-my-pocket/
   Later appeared on Dhaka Tribune as " Where Is My Tax Money Going?" on November 19,2016. For more read at https://archive.dhakatribune.com/opinion/op-ed/2016/11/19/tax-money-going