Amidst immense oppositionParliament approves 5% sales tax [Archives:2005/857/Front Page]

July 7 2005

Yasser Mohammed Al-Mayyasi
SANA'A- In its session held Tuesday July 5, the Parliament approved the sales tax law No. 19 for the year 2001and the amendment of some of its articles after heated debates, which are still going on between the government and the opposition.

The Parliament approved 5% as the sales tax on commodities instead of the 10% proposed previously.

The session witnessed heated controversy leading the parliamentary bloc of Islah, the biggest opposition party, to withdraw from the session in protest against the vote on the sales tax. The other opposition parties showed their objection to the vote.

The opposition parties at the Parliament including Islah, Nasserite and The Yemeni Socialist parties as well as the independent MPs issued a statement confirming their objection to the law drafted by the government represented by the ruling People's General Congress Party.

The statement stressed that the government never suggested any essential amendments to some articles of the law and did not take into consideration the heated debates taking place at the parliament over the sales tax law.

The opposition accused the government of misleading people since the commodities it said were exempted from the sales tax were already exempted at an earlier time.

The opposition said the reinforcement of the sales tax law will leave negative influences on the commodities, and citizens will pay the price for the failing policies adopted by the government and the corruption practiced at the government's institutions.

The sales tax law issued under the Republican Decree No. 19 for the year 2001is due to be passed on this month. It caused an unprecedented crisis between the government and the opposition and large demonstrations in most of the Yemeni main cities.

The demonstrations were accompanied by chaos and shooting of fire claiming lives of innocent citizens and security troops.

Accusations have been exchanged between the ruling party and the opposition joint meeting parties, and the government blamed the opposition, mainly the Islah Party, for inflaming chaos and uproar.

The opposition parties believe that the political crisis was caused by the government's false policies and the rampant financial and administrative corruption. They hold the view that citizens cannot afford any new economic burdens.

Traders believe that levying the sales tax is a big catastrophe and it will hinder them from achieving progress and success in investment.

On the other hand, the government holds the view that opposing the sales tax exemplifies a tax evasion by traders to maintain their personal interests at the expense of the public ones.

Traders represented by the capital's Chamber of Trade and Industry (CTI) sued a legal action against some articles of the law to the Supreme Constitutional that has not discussed it yet.

The lawsuit was filed by Dr. Hassan Mujalli, CTI lawyer, against the President of the Republic, the Parliament Speaker, the Prime Minister, Legal Affairs and Finance ministers, and the President of Tax Authority.

The lawsuit was compiled in a book of 160 pages including legal items that invalidate the sales tax law.

Observers of the Yemeni economy declared that there will be a price hike and nationwide chaos unless the government is ready to monitor the market activities. Price hike indicators were vastly realized over the last few days.

Last Tuesday's session was held in the absence of the Parliament Speaker Sheikh Abdullah Bin Hussein al-Ahmar.