The Yemeni private sector has stepped up protests against the government's decision to put the General Sales Tax law into effect, a step which has been delayed for seven years. Yesterday [April 16, 2012], a source at the General Tax Authority (GTA) in Sanaa told Al-Hayat that scores of merchants encircled their headquarters in an attempt to pressure them not to enforce the law, and to forgive the taxes owed by a number of merchants who have thus far refrained from paying the debts they owe to the state. However, sources in Sanaa’s Chamber of Commerce asserted that the merchants’ protest is peaceful, and that it is directed against the corrupt practices of the GTA.
In a statement, GTA President Ahmed Ghalib said that scores of protestors surrounded the GTA building, preventing staff from entering or exiting, in response to the imposition of the sales tax on merchants. He criticized what he described as an incitement campaign on the part of the government over the last 10 days. The chairman of the Chamber of Commerce and Industry in the capital, Hassan Al-Kabous, said that the sit-in staged by members of the private sector would continue until the protesters’ demands are fulfilled. He added, “All state funds are going into the pockets of corrupt officials at the GTA. We want all taxes to go directly to the state treasury.”
Yemeni merchants are calling on the GTA and the Ministry of Finance for the prompt nullification of all the tax debts that have been mounting for weeks due to the refusal of merchants to comply with the law and pay the sales tax. The GTA insists on the implementation of the sales tax law, and is obligating senior merchants to keep records, document their commercial activities and issue bills for their sold goods. A 5% sales tax is to be added to the original price of the goods sold.
Sources at the GTA said that Prime Minister Mohammed Basindawa agreed to cancel the merchants' debts to the government, but also noted that merchants are trying to breach previous pledges they had made to the government. One source added, “All we want is to apply the law so that public taxes reach the treasury of the state. We want to prevent the evasion of taxes, but the merchants do not want to see such a law implemented.” The sources pointed out that the sales tax — technically in place since 2005 — does not exceed 5%, the lowest in the region and the world. They argued that any setback in the market is the result of the greed of merchants, who are trying to shift responsibility onto the GTA and other institutions.