Federation of Chambers of Commerce and Industry demands freeze of value added tax Warnings of a possible economic crisis [Archives:2004/721/Local News]

March 18 2004

Mohammed bin Sallam
On Monday, 15 March, at the conclusion of the regular session, the general assembly of the Federation of Chambers of Commerce and Industry confirmed its rejection of the value added tax. It called for its cancellation and the amendment of investment law to enhance and attract local, Arab and foreign investments. The federation called for holding a national conference to discuss the economic challenges that would contribute to crystallizing a national vision regarding providing a suitable atmosphere for general growth.
The attendants called also for combating smuggling, which deprives the state's treasury of nearly 130 billion Riyals.
The Federation warns of the burden of internal and foreign debt, which have reached rates not compatible with country's development needs and constitutes a burden on financing and investment services. The gathering drew the attention to the negative impact of a high inflation rate and higher prices and limited job opportunities on the values of the society. Instead, they called for serious and genuine work to reform and activate the judicial system, to improve the tax revenues and connecting tax revenue with national development needs through raising the qualification of its cadre and giving up threatening policies and unlawful activities.
The statement of the Federation distributed last Tuesday said that the Federation discussed the economic policy of the Government, the stagnant situation of the economy, the inefficient structures and the weak performance of economic sectors due to unbalanced and irrational policies. The weak investment and saving rates, high poverty, unemployment and inflation rates, combined with desertion of national capital due complex administrative policies, weakness of security and disrespected judicial regulations, higher smuggling rates, administrative corruption and misuse of resources do not create conditions to assist development and economic stability.
On the other hand, Parliamentary sources confirmed that the Government presented to the Parliament last Sunday a package of economic measures consisting of customs and tax legislation, increases in the prices of oil derivatives, and a slight increase in wages and salaries.
Many economists and politicians are convinced that the Government's economic package and measures are catastrophes, and will lead to the deterioration of citizens' living conditions, since they touch upon all economic aspects related to the daily life of every Yemeni.
Parliament and the Al-Shoura Council began last Sunday a discussion of the government's decision to increase the prices of diesel and petrol in preparation for its endorsement prior to it implementation in mid 2004.