Thursday, June 11, 2009

Tax Reform Falls Flat On Its Face

That's what we need to conclude when we consider the solidarity levy of between 3.4% and 5% on profits and 1% and 1.5% on turnover that Sithanen has included in his recent budget. There is also the 2% CSR. And the higher-than-what-they-ought-to-be petrol pump prices. So the real tax rate for corporates and for individuals is getting closer to where it was before Sithanen dismembered our progressive tax system and screwed up our long-term financial plans. And when an independent study warned that he got his tax policy basics wrong he dismissed their findings with typical arrogance.

These new taxes also kind of puts into perspective one of the two pieces of wisdom he posited that anyone aspiring to become Minister of Finance should have: know the effect of taxation on growth rates. Things actually unfolded differently: he moved to a flat tax and the average growth rates of the current government will be the worst in decades. Li mem meyer!

1 comment:

Sanjay Jagatsingh said...

Komye letan bizin pu konpran ki avion la pe al drwat dan montayn.