Daily Times

The government has imposed a four percent super tax on all sectors, but it’s understandably the 10 per cent tax imposed on the 13 highest-earning sectors last year that is all the rage.

The government’s going to score precious points with the working classes by claiming to tax the rich and protect the poor even as the industry is up in arms and the opposition is shrieking about the prospect of businesses shutting down and unemployment and inflation rising even further.

But while it’s obvious that the new and harsh “one-time” tax will bite into the profits of the richest corporations in the country, concerns about big firms simply passing on the burden down the chain and spiking inflation in the process are most likely exaggerated.

The move can, in fact, be called the best one on the table in what are after all extraordinary circumstances.

There are, after all, a number of schools of thought, not to mention overwhelming public opinion, which argue in favour of taxing the rich much more than the not-rich to keep balance in the economy and society.

There’s also the point that successive governments showered them with incentives that didn’t reach smaller businesses and helped them make extraordinary profits for a very long time.

So what’s the big deal if they are being called upon to pay a little of that back to the country and also the people whose tax money ultimately fed their growth in the form of subsidies and incentives?

The government should still know that its clever idea of isolating its own vote base, which comprises the agriculture sector, retail sector, etc, from more taxes has not gone unnoticed.

It’s done that because sooner or later an election will be called and having already taken very unpopular decisions, it wouldn’t want to alienate the people that usually stand with them as well.

But that’s going to cost the economy because despite this one-time extraordinary measure, the tax base will not expand and we will not be too far from we are now when it’s time for the next budget.

That means the super tax will most likely work for now, but a lot more is still needed for the long term. *