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The horse before the cart

Aug 06,2018 - Last updated at Aug 06,2018

It is commendable that the government is actively seeking dialogue and consultation with various shareholders on the shape and form of the new income tax legislation, yet doing so before putting some life into the national economy would be like putting the cart before the horse.

There is a broad agreement that the economy and business confidence are at best at a standstill. One hears complaints from all sectors in the economy suggesting that the vital signs of the economy are anything but healthy. Whether true or not is not the real issue. The public perception that the economy is not in the best of health is the important issue. Instead of trying to figure out first how to come up with a new taxation system for the country, why not first breathe new life into the seemingly stagnant if not a dying economy.

There can be no doubt that the extent of the alleged corruption in the country as demonstrated by the “tobacco factory scandal” has put the economy on a sliding mode. Fewer people are willing to invest in such a business climate and major potential investors appear to be reluctant to share in the development of the country under current conditions.

The first order of business, therefore, should be dealing in depth with the corruption file once and for all by exposing it wide open, and dealing with it in such a transparent way as to restore confidence. Anybody who does not see this urgent crisis for what it is could be just putting blinders on his eyes or ear plugs in his ears.

We say first things first and putting the economy on the right course is certainly the right course. The rule of thumb in economics is that to energise a country's economy, there is a need to lower taxes across the board, not increase them. Our authorities need to know this ABC in economic stimulation.

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