Touria Prayag's Blog

L’express Weekly, 26 November 2010

Posted in Uncategorized by touriaprayag on December 10, 2010

<!– /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:””; margin:0cm; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”; mso-fareast-font-family:”Times New Roman”;} a:link, span.MsoHyperlink {color:blue; text-decoration:underline; text-underline:single;} a:visited, span.MsoHyperlinkFollowed {color:purple; text-decoration:underline; text-underline:single;} @page Section1 {size:612.0pt 792.0pt; margin:72.0pt 90.0pt 72.0pt 90.0pt; mso-header-margin:36.0pt; mso-footer-margin:36.0pt; mso-paper-source:0;} div.Section1 {page:Section1;} –> Pdf Weekly 26nov

Budget speech: back to the future

Those who feared that Pravind Jugnauth might terminate
the measures initiated by Rama Sithanen
and which he never tired of criticizing may have
overlooked how little a minister of Finance (especially
one devoid of knowledge of fi nance and economics)
can bring his personal infl uence to bear on the budget he
presents. A horde of civil servants, advisers and cabinet
ministers all have a say in what is to be presented to the
population and the Prime minister puts the fi nal seal. It is
hardly surprising then that the neo-liberal philosophy, softened
with humaneness, underlying the measures proposed is
substantially unchanged. And it is wise that the bulk of the
policies and schemes which steered us away from trouble
when the Great Recession hit its strongest have been kept.
The measures which have generated the most negative reactions
are the ‘sin tax’ on cigarettes, alcohol and gambling and the
‘Robin Hood tax’, aka ‘solidarity tax’ which was bravely slapped
on those at the very top of the income scale.
The fi rst tax is long overdue. Cigarettes are a cancer- literally
and metaphorically – insidiously eating away at our society and
alcohol is ravaging homes and causing irreparable damage to families.
There is no doubt that a price increase is the single most effective
measure to reduce consumption. Who can argue against these
measures? No one. Except hotel operators that is, on whom, by the
way, the government is planning to spend 1billion rupees in the
promotion of Mauritius abroad. Their concern? That their profi ts
might go down! Anybody listening here? A small bottle (330ml) of
beer costs Rs20 in the shops. The hotels are selling the same quantity
of draft beer at Rs 120 and we should all weep because their
profi ts might be reduced by one rupee?! As for gaming houses, only
one piece of advice to those who operate them: lie low – very low!
Concerning the ‘Robin Hood’ tax, no one who has a minimal
sense of social justice can put a cogent case against those
who earn more than Rs 2 million a year (2,500 out a total of 150,
000 tax payers!) dishing out a meagre percentage of ten percent
from their EXEMPT INCOME only! It is a very small price the
super-rich are asked to pay for social cohesion, peace and public
weal. The fallacy some ‘advisory fi rms’ have been peddling and
the doomsday scenario they are painting are hard to understand.
Their scaremongering arguments of capital fl ight and discouraging
of foreign investors are ludicrous sophistries. Where would
the capital go? To countries like the UK, for example, where the
tax reaches 50%? Even then, unless the capital is illegally stashed
away, taxation applies to the worldwide income of the taxpayer.
As for investors, tax is just one consideration. Top of their decision
tree of where to invest is the prospect of making profi ts. A clean,
safe and socially just environment, offering a high quality of life,
where time is spent effi ciently instead of sitting in traffi c jams are
other major considerations for bona fi de and desirable investors.
Government can only provide this enabling environment if it has
adequate funds to invest in creating, upgrading and maintaining it.
What we should be criticizing instead is the lack of any measures
in this budget to stem waste in government and parastatals,
as exposed year in, year out by the National Audit Bureau. Yet,
for as long as that is not done, a big chunk of the money raised by
government will be squandered by unscrupulous parasites. Again.

Budget speech:
back to the future
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