TICU disavows agreement to implement sales tax law [Archives:2006/943/Local News]
By: Mustafa Ragih
SANA'A, May 2 ) Trade and Industry Chambers' Union (TICU) started a media campaign disavowing a previous agreement it signed with President of the Republic to implement the sales tax law by the advent of 2007.
The TICU waged a broad campaign against the sales tax law in mid 2005, culminating with an agreement to pass a 5 percent tariff instead of 10 percent on imports entering the country via land outlets. The same tax is passed on the industrial sectors, however, implementing the tax in the trade sector was postponed until 2007. The law will be applied on the basis of sale bills.
Meanwhile, trade sector representatives held a consultative meeting last week with other representatives from the International Monetary Fund (IMF) and the World Bank (WB) to exchange viewpoints on applying the sales tax law, issued in 2001.
In a statement following the meeting, Chairman of Trade and Industry Chamber in the capital Mahfoudh Shammakh said: “What happens is a conspiracy against the Yemeni economy and such conduct aims to create a sedition and divide the society.”
Bashammakh blamed the IMF for its insistence on applying the sales tax law while economists said the trade sector rejected the sales tax, as traders fear the sales tax mechanism requiring them to withhold regular accounts. This will help discover tax evasion in trade and industry interests tax because the tax authority knows about monthly sale bills.
Applying the sale tax in Yemen comes as part of partnership with international foundations and donors to qualify Yemen's economy and compensate for production tax, which was replaced by the sales tax.
Bashammakh commented the IMF is a means of destruction because it wants to apply its program overnight. He added traders will exploit the available space channels to denounce the sales tax law, pointing out that the condition of withholding regular accounts is a catastrophe as the majority of trades manage millions of Riyals, however they do not know how to write checks.
Bashamakh's statement excluded the fact that the sales tax is passed only on traders whose monthly sales reach 50 million Yemeni Riyals, and this is why they are required to withhold regular accounts.
The tax authority is being reshuffled by a Canadian Consultancy Company with the main objective of developing the authority's institutional and administrative structure. The reform program conditioned reshuffling the tax authority to cope with sales tax application.
The Trade and Industry Chamber, represented by Shammakh, vented its criticism of the IMF saying: “the majority of traders run millions and cannot write checks.”
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