Tax: People with higher incomes should be taxed more, it was pointed out by some of those attending a meeting with the Opposition Leader in Pema Gyamtsho in Gasa, on May 10.
A corporate employee said there are many people, especially those living in Thimphu, who own several vehicles, buildings, and businesses but find ways to evade paying taxes or pay minimal taxes.
The corporate employee said it is civil servants and state-owned enterprise employees who pay their income taxes as per the law.
The corporate employee said that while the government has been availing loans and grants to fund development works, it has not increased the taxes for those who own higher incomes.
Raising concerns on the present taxation policy and increasing inequality between the rich and poor, some asked the Opposition Leader to ask the government about what it plans to do.
Acknowledging the people’s concerns on the need to increase taxes, the Opposition Leader (Dr) Pema Gyamtsho said tax is a major factor contributing to the economy in most developed countries, and has been levied in such a way that the wealthier sections pays higher taxes while people from the lower income brackets pay less.
Tax is also an instrument for social equality, he said. “If we do not revise the current taxation policy, it is no doubt that richer would become rich while poor will remain poor.
Citing an example of Denmark, where people pay 47 percent income tax, but those who earn more pay even higher taxes. He also quoted an example of how high inheritance tax in Japan has become a success story.
“Advocacy education is very significant and every government should increase the income tax for the sustainability and security of the country,” he said.
A villager from Khatoed gewog said people show reluctance to paying tax although the amount is minimal due to lack of transparency in the government system. Therefore, he said it is important for every ruling government to ensure any expenditures or tax collection is shared with public in a very transparent manner.
The Opposition Leader said that at the present juncture, tax income contributes only nine percent to the country’s gross domestic product (GDP), which is less and doesn’t contribute much to any developmental activities. However, he said despite that, sharing information with people is important.
He said having graduated from the least developed countries category, many donor countries will leave. The country might not also get low-interest loans from the Asian Development Bank.
Due to which it is important to become self-reliant, and expenses for education, health and others works should be borne through income from taxes.
He said when the majority of donor countries drop out, only a few countries will be left, which makes it likely that the country will increase its dependence on one or two donor countries. This dependence could also mean a threat to the country’s security.
Dawa Gyelmo | Gasa