LETTER OF THE DAY - One of the most evil taxes ever!
Published:Monday | April 21, 2014 | 12:00 AM
THE EDITOR, Sir:
The news that the Government plans to start taxing withdrawals from banks and other deposit-taking institutions, effective June 1, 2014, is shocking! The announcement came on the eve of Easter, Christianity's holiest periods. The timing was perhaps intentional, as most persons would've either missed the news, or reacted with constraint because of the season.
This new tax on bank withdrawals is one of the most evil taxes any government has ever imposed on its people. The banking industry is already so profitable, with exorbitant bank fees on just about everything. This type of tax on withdrawals is also rarely imposed, internationally.
Saving in banks should always be encouraged, as it is pivotal for the financial sector and provides funds for loans and investment which, in turn, stimulate production, employment and earnings. Any tax on saving interest income, or, in this case, withdrawals will ultimately become a deterrent to saving, which most governments would normally strive to avoid. Savings deposits are a key element of economic development.
According to media reports, the new tax will be applied to electronic banking, points of sales, cheques, and withdrawals at ABMs, ATMs or ETMs, and over-the-counter/Internet transfers, with the exception of transfers between accounts (same person in the same financial institution).
I believe this tax will also be cumbersome to administer and pay over to Government, as tax rates will vary based on amounts withdrawn, per transaction. We understand the Government's budgetary situation. Every year, there is a shortfall, but there are many other things that could be taxed, such as luxury items. Government could also do lots more to broaden the tax net, forcing those not paying taxes to do so, instead of always going after regular taxpayers.
Bank deposits will most likely hurt taxpayers more, as their income is usually deposited electronically and they must withdraw. Why tax the same persons so many times?
We don't see much effort by the Government to curb its own expenditure, such as excessive overseas travel and lavish perks! We don't see much effort to curb waste in public spending! It appears the Government must be getting desperate or running out of ideas.
The Opposition must be forcefully in its response, and I urge the people of this country to join forces to resist this one.
P. CHIN