The subject budget was recently passed by Parliament. Specifically there were two “hot topic” items – namely, (a) increased taxes of web shop operators, and (b) the increase of VAT from 7.5 percent to 12 percent.
Unfortunately item (a) got the most publicity coverage even though item (b) would have an impact on many more people.
Personally I do not have an issue with the increased taxes on web shops or numbers houses. If one wishes to establish and operate a successful business one should have a moral and ethical compass. The web shops do not even seem to consider such criteria. They undertake their businesses predominantly in areas of low income with a net result of making just a handful of persons obscenely rich – just look at the real estate holdings of the top people.
Their operations have proliferated in the poor areas where many people spend a good deal of their disposable income (a sizeable amount very likely sourced from government subsistence grants) with only a limited chance of success thereby keeping themselves continually poor.
The government has recognized that many of these people have been left behind and has laid out plans to assist in pre-determined economic zones. I would be most disappointed if the government plans for these zones include incentives for web shops or even liquor stores – another business arena which lacks ethical and moral values, although not to the same extent as they also sell some of their products to middle-class and wealthy people.
The increase in VAT is a very different issue. In the country’s given debt circumstances and with the anticipation of the elimination of customs duties, income has to be generated from somewhere. What surprises me is the fact that governments never seem to learn the “law of diminishing returns”.
When a government increases taxes the public finds more and more ways to reduce the burden either directly or indirectly – i.e., legally or illegally. The government’s projected income from increased VAT will fall far short of the revenue generated in their computer models – this is always invariably the case. If the government had agreed to limit the increase the VAT rate to 10 percent it would have had just as much revenue income success and not aggravated the public to the same extent – as they say, a “win-win” situation.
– Fair & Balanced