About The Solidarity Tax  

By Nobel P. Loser

For most of them, and from their hide caves, some anonymous voices are hitting at the Solidarity Tax of 10% on dividends announced in the recent budget. There are also references being made to some kind of Leninist approach as regards specific policy decisions and general macroeconomic orientation.Let’s put it bluntly. Those anonymous voices, which one would have wished had come out in the open, have a legitimate right to promote their opinions. The good thing about them is that they have their own easy access and exit points within the media landscape. And this extends beyond the usual one section formula. 

As of now, no ‘journanalyst’ has dared venture out to caution us on the motive, the lies and truths that still surround this thorny issue of dividends. It’s now common knowledge that on all main issues related to fiscal and monetary policies, but not restricted to these, the country is made to hear the usual biased views of those holding clear conflicting positions in those matters. Thanks to the(ir) media! 

First things first. To make matters clear, it’s high time to make public (i) the list of countries where dividends are being taxed, at a rate beyond the 10% local threshold, (ii) the list of countries where dividends were taxed, before being relaxed and the reasons thereof as well as the fiscal and economic repercussions of any such relaxation, and (iii) the economic performance of those countries and their share of business across continents and how their corporate entities fare nationally and internationally. This done, one should start comparing likes with likes. If wholly unearthed, these facts will speak louder on the issue of taxing or not taxing dividends.  

Now back to Corporate Mauritius. In the name of transparency and good governance, will it be asking too much and too awkward to request that the Top 100 companies, plus a couple more, to advertise their shareholder portfolio and the amounts of dividends paid and received and how this has evolved since the policy decision to exempt dividends as taxable income was taken? And in the name of transparency, to make public the names of those who lobbied for making dividends tax-free in Mauritius? These days the Wikileaks website can be very helpful towards achieving above, if whistle blowers want to stay anonymous. 

Also, one wonders if a financial forensic enquiry should not be conducted on the recent initiatives undertaken by a few corporate bodies on the precise issue of dividends and shareholding prior to the last budget and to verify whether those initiatives were bona fide and not at all related to any kind of insider trading? 

Those shedding crocodile tears on the budget announcement as regards dividends should not be allowed to take Mauritians for a goose chasing campaign in the Sahara desert.  

It’s not being Leninist to state that, for too long, Corporate Mauritius has been allowed, with the complacency, support and connivance of the State and State Representatives, to call the shots unhindered. At all times.  

It looks like Wall Street was born first. And God created Mauritius afterwards! And we are made to believe that He insisted we never depart from the customs and rituals that have made Wall Street so famous recently.  

But if we are not suffering from amnesia, we can easily remember who exactly were the ones who brought the US to its knees economically with the accompanying social consequences thereof; what happened to Ireland, after Greece; and as regards the future, what is in store in a few more countries in the euro zone?  

One thing is certain according to records of the international police, Interpol. No Leninist was seen on the scene of crime in those countries.  

* * * 

Hope Soodhun succeeds 

To tell you honestly, Shawkutally Soodhun, the Commerce Minister, has been too vociferous since his appointment. Normally, the least one would have expected from a Commerce Minister is to avoid talking, at least too much. He did the contrary. And this may not augur well for the incumbent of this portfolio.  

The last statement heard from him relates to ration rice, more specifically in connection with price and quality. Standing in Parliament, the Minister stated that he would see to it that ration rice is sold at its market price, which in clear terms means the abolition of government subsidy on this item. And he added that he would see to it that the ‘weaker ones’ be allowed to pay an affordable price in an improved price-quality context.  

For once, Soodhun is absolutely right. And for once, sincerely and honestly, let’s all hope he succeeds in this endeavour. Not for his personal good or any cheap political mileage. But for the good of the country, for the good of public funds, for the good of the population.  

Still some bare facts need to be laid at the Minister’s door. They are as follows: 

In 1992, that is nearly 18 years back, one Mr Rama Sithanen, not doctor then, did exactly that. Outright, he abolished subsidy on ration rice. Who were in government then? The MSM-MMM coalition, led by SAJ and Paul Bérenger, respectively number 1 and 2 in government. The LP and PMSD were in the opposition. The decision to remove subsidy from ration rice was taken by the Cabinet. It was therefore collectively assumed by both Jugnauth and Bérenger.  

In response to a mounting popular pressure on this issue, SAJ, in his usual natural straightforward and no nonsense Rambo style, went public with a statement which became notoriously famous. SAJ was not ready to allow subsidy on ration rice, when everybody knew that the bulk of this imported ration rice was used to feed animals, dogs in particular.  

SAJ kept firm until the political situation went bankrupt for him.  

After he sacked Bérenger in 1993, the latter took his party to sit on the Opposition bench. Prior to that, Bérenger met the press at the MMM headquarters at Poudrière Street. And believe it or not, this man stated that the removal of subsidy on ration rice was ‘grave’ and was one of the many issues that upset him while in government.  

At question time, a journalist asked him: ‘If this be the case, why did you not resign at the time this decision, which you now say is bad, was taken?’  

In his usual highly roundabout intellectual habit, Bérenger tried to drown the fish. 

Later on, MMM and LP got politically engaged.  

The PMSD of late SGD entered government ranks and one of the conditions imposed was to re-establish subsidy on ration rice. Which was done! 

Today, the political landscape is different. LP is at the helm of power, with a charismatic leader as PM. His coalition partners in government are the MSM and PMSD. And the MMM now sits on the opposition bench.  

This is the time Soodhun has chosen to bring this thorny issue to the surface again.  

And one thing has remained unchanged during the last 18 years. Subsidized ration rice, for the most of our imports, still feeds animals, birds and particularly dogs, including Rottweiler now sitting on the bench of the accused for brutality and attempt at murder.  

Let’s hope that no trade unionist, no politician from any rank and file of any party or NGO tries to bark against this decision of national interest – removal of subsidy on ration rice. Our country can’t afford to subsidize rice to feed animals, birds.  

Instead, we hope that they all come forward with realistic proposals on how to support the ‘weaker ones’ as regards a new pricing and distribution policy for ration rice. 

As far as Soodhun is concerned, let’s hope he talks less and acts more to succeed in his endeavour. He can still talk to Sithanen for any advice, or simply drive to Le Réduit. Pravind was too young then! 

* Published in print edition on 3 December 2010

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