No person with a right mind will decide to take tax when the economy is collapsing- Gasim

Leader of the opposition Jumhooree Party (JP) and Maamigili MP, Gasim Ibrahim has said that no person with a right mind will decide to take tax from the people when the economy of the country is at stake and is collapsing.

JP Leader, Gasim said this in view of the President’s decision to take a general tax from small to large enterprises in the country.

Speaking at the Fasmanzaru programme, Gasim said that it is obvious that if you take money out of the economy there is less money in the economy for growth and jobs. He said that taking taxes from the people does nothing to help the collapsing economy.

Gasim said that by taking taxes from the people and as a result when the government has more money to spend it has little effect on the economy and is very rarely spent in an efficient manner.

Gasim also criticized the decision of President Nasheed to raise the tourism GST from 3.5 to 5 to get rid of the budget deposit. He said that this decision has no weight and will not have any effect on the economy and will not help to stabilise it.

Meanwhile, speaking at a function to mark International Workers’ Day, President Nasheed announced a number of tax reform measures to be introduced by the government aimed at reducing the prices of goods and services.

He said “the government expects a 10 to 15 percent reduction in prices after import duties are removed.” He said, while 2011 budget estimated Rf2.3 billion from import duties, “the reforms to our financial system involve creating a tax mechanism, like in other civilized societies, instead of depending solely on import duties.”

The President revealed that, along with amendments to import duties, the government would also propose an amendment to the Parliament to increase Tourism Goods and Services Tax from 3.5 percent to 5 percent, and impose a Goods and Services Tax of 3 percent on general trade.

Among the reforms to taxation, the President also announced that the government intended to introduce an income tax on those who earn more than Rf30,000 per month.