Supreme court discusses appeal against sales tax [Archives:2005/848/Front Page]

June 6 2005

Yasser Mohammed Al-Mayyasi
The Supreme Court (the highest judicial authority in the country) held a sitting Saturday June 6 at the Ministry of Justice and discussed the appeal filed against some articles of the sales tax law No. 19 for the year 2001.

The capital's Chamber of Trade and Industry (CTI) represented by Dr. Hassan Mujalli, its lawyer, filed an appeal against President of the Republic, Speaker of the Parliament, Prime Minister, Minister of Legal Affairs, Minister of Finance and President of the Tax Authority.

At the session, attended by a number of the Supreme Court members, the CTI's lawyer and some businessmen, the CTI's lawyer read out the appeal filed by Yemeni traders claiming the tax sales law is unconstitutional.

The appeal was presented in a book of 160 pages containing articles Dr. Mujalli confirmed are against the constitution and the Islamic Sharia, according to which the law should be cancelled.

The sales tax law is scheduled to be put into practice by the beginning of July.

The appeal covered several legal justifications, one of which is that the sales tax law was drafted to devastate fixed legal relations that bind the main laws together.

“The sales tax law is a flagrant violation against the constitutional texts No. 52 and 53 that include basic rights for the Yemeni citizen”, the appeal said.

The fourth justification contained in the appeal confirmed that putting the law into practice by the court will make traders and citizens suffer huge material losses.

The appeal urged the court to issue a decision to halt application of the law till issuing a verdict on the issue by the judiciary.

Dr. Mujalli stressed some articles of the law appear to violate the constitution and the Islamic sharia, particularly the article that endorses controlling all the capitals of individuals and families for the sales tax to be paid. According to the article, nobody is allowed to compete with the Tax Authority in terms of gains, and there is another article that prevents individuals from traveling inside and outside the country unless they pay the tax.

The law, which caused uproar and tension among people, levies a 10% tax on traders whose annual sales reach the tune of YR50 million in terms of commodities and YR40 million in terms of services.

The sales tax law No. 19 for the year 2001due to be applied in July caused a crisis between the government and the opposition, and then streams of Yemenis took to the streets in several main cities protesting against the law.

The demonstrations were accompanied by chaos and shootings of fire leading to many death cases of citizens and government troops. Over the last few months of the crisis, the government blamed the opposition for exploiting the sales tax to foment violence and chaos and shake the national security.

Objectors to the sales tax attributed the acts of violence that accompanied the demonstration to the wrong economic policies and the rampant corruption practiced in the government facilities. According to them, the sales tax will have its negative impact upon citizens before traders.

Traders emphasized that levying the sales tax is a catastrophe and it will not help them to achieve successful achievements. The government, on the other hand, holds the view that the majority of traders tend to evade the tax to serve their personal interests.

Observers and economists ascribed the fierce objection to the sales tax to failure of government media to publish enough information to all the Yemeni citizens and convince them of the aims of the sales tax.

It is worth noting the Supreme Court is due to held a sitting on Tuesday June 7 to closely look into appeals filed against the sales tax law.