Rising Taxes: A Pain In The Neck

Narayan Upadhyay

Buffeted by the heavy disparagement for failing to deliver its promises, the government on Monday brought forth a report in which it highlighted the success it accomplished during its five months in office. Despite counting its success on a 72-page report, the government is criticised for failing to keep the rising prices under control. Inflation has gone up as the government has failed to keep a close tab on the prices of commodities and services. The rising prices coupled with the rise of taxes at different layers of government have done little to heighten the image of the government.

Controversy
The government is also criticised for increasing taxes on different consumer goods and services. Soon after he assumed the office the finance minister kicked the dust of controversy by stating the state coffer had almost been empty, saddening the people and nation to the core. The budget speech from the finance minister witnessed a rise in taxes on different goods and services. He, however, failed to increase the salary and perks of civil servants and the allowances to the senior citizens as promised by his party during election time.
Ever since this government has come to helm, the imposition of taxes at various levels and rise in prices have stayed on because the government has not been able to check them effectively. Needless to say, both acts have their direct bearing on the people’s ever thinning wallets.
It has often been reported that the three tiers of the government - the federal, provincial and local - have been imposing new taxes or increasing the existing taxes which has hit adversely the business community and common people. The business people have raised the issue of double taxation which should not happen at any cost. The business community has expressed dismay that the double taxation has taken effect ever since the present government came to power.
Lately, the lawmakers from the opposition and treasury benches have criticised the acts of imposing taxes at the provincial and local government levels. During as parliamentary session, the lawmakers criticised the government for not being able to stop the provincial and local governments in imposing taxes on things such as chickens, ducks, bicycles and products for household consumption. One of the lawmakers of the treasury bench even cracked a joke that the days are not far behind when the local government would impose taxes on the individuals for living. It appears that the governments, both provincial and local, are looking for ways and means to impose taxes to raise their revenues.
Besides high taxes on land and businesses, people are now forced to pay Rs. 1,000 for birth and death registration, which were earlier provided as free services. It seems that the three layers of government are more focusssed on the raising taxes.
The imposition of new taxes sans government facilities has become a perpetual pain for a large section of the Nepali people. People are made to pay taxes on many topics. The services or public facilities which a tax payer must receive as a citizen of a welfare state have not been as vibrant as they should be. For example, the vehicle owners of the country pay high road and service taxes but the poor state of nation’s roads tells a story that vehicle operators have not got the facility they have expected from the authority. On the other hand, the government-run public buses or railway services in the nation is almost non-existent. The government-owned health and education institutions provide substandard services to the people compelling them to opt for private health and education centres.
The government few weeks ago had come under heavy criticism for overlooking the demands of senior orthopaedic surgeon Dr. Govinda KC who had observed 15th round of hunger strike to bring reforms in the medical studies and overall health system of Nepal. As KC’s demands found wider support in the country, the government had felt compelled to sign agreement with KC to address the protesting doctor’s demands. Earlier, the government had done everything possible to counter the fast-unto-death protest of Dr. KC, which only dented the government’s image. There were several other promises the government had failed to deliver, though the government and its supporters have continuously been touting that the government has been successful in translating its words and promises into reality.
Indeed, the tax payers in the country have not been able to avail of many of the government facilities. Same is true about the poor who are given priority by the government while providing public facilities owing to poor delivery system.
In the meantime, the introduction of the federalism system has proven to be a bane for the common citizens, when it comes to pay taxes. Besides paying several taxes imposed by the central or federal government imposes, a citizen or business community member needs to pay other taxes to the provincial and local government, thanks to the constitutional provisions. According to some reports, the constitutional provision authorises the local governments to charge tax on businesses, house rent, land and building registration, motor vehicles, tourism, advertisement and land revenues while another constitutional provision gives rights to the provincial government to impose tax for house and land registration, motor vehicles, entertainment, advertisement, tourism, agro-income. It has also been reported that the provincial and local representatives at many places have ‘ utilised’ the collected taxes on buying expensive vehicles and other amenities for their use.
These taxes have, needless to say, added extra burden on common folks and businesses because the taxes imposed by the provincial and local governments are often higher. At some cases, the tax payers have to pay twice the same taxes for the provincial and local governments.

Dissatisfaction
The ‘new tax regime’ has led to a rise in dissatisfaction among the business community and the citizens, which is one of the main reasons behind the increasing unpopularity of the government. This situation has, on the other hand, brought a blot to federalism. The government must address the deteriorating situation caused by the rise in the taxes and exorbitant increase in the prices of goods and services. Should it fail in curbing them, no report highlighting the success stories would do any good to the government. The common populace of the country needs immediate relief from rising taxes and prices and the government must act to address their woes.

 

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