Husnu Suood is a former Attorney General and prominent lawyer in the Maldives. This op-ed first appeared in newspaper Haveeru on August 29, 2011. Translated and republished with the author’s permission.
Corruption has spread and taken root in the Maldives to extreme levels. Corruption allegations can be levelled everywhere. This evil disease has become common in state institutions, government offices, public companies as well as private companies and businesses. As a result of corruption allegations against persons filling high posts of state institutions, public confidence in these institutions are lost and instead of places with public respect it becomes the target of public ridicule.
The loss of public funds and opportunities for the public due to corruption is increasing daily. If Rf1,000,000 of public money is spent to purchase a generator instead of the Rf700,000 that should actually have been spent, the public ends up losing Rf300,000. If this Rf300,000 is not pocketed by employees, it could have been spent on other projects for the public. In this vein, we can only imagine the amount of money that is lost on a national level.
If an employee of a private business sells goods at a higher price and deposits the difference into his personal bank account, the business is going to go bankrupt instead of developing and prospering. While the shopkeeper who is employed with a salary Rf4,000-a-month builds two dhonis of his own, the owner of the shop goes bankrupt. If businesses do not lose money in this manner, national productivity is going to rise.
If a state employee spends in excess of his means, buys expensive items, changes his lifestyle and visits Europe for two-week holidays, he must have sources of income or the resources to prosper.
When the personal income tax comes into force, individuals would be legally compelled to file tax returns or financial statements once a year. The statement would clearly show sources of income as well as the level of income. If a person buys expensive items disproportionate to his income or spends in excess of what the financial statement shows is his actual income, the way will be open to determine whether or not he earned that money legitimately.
For example, if tax returns show that a person’s income for the past five years was Rf30,000 and he suddenly buys an expensive brand new BMW car, that would reveal that he has received illegitimate monetary gain. It would mean that he either falsified his true income to evade taxes or that he somehow received a large amount of money through illegal means.
Therefore, if an investigation is launched into such a case, the individual would have to bear responsibility for proving how he suddenly came about the assets or money. If he got the money through selling an ambergris he found, he would have to prove it. If the person got the money through legitimate means, he would not have to worry. If for instance he brought a plot of land legitimately, it would not too difficult to prove.
Drug trafficking and money laundering are two very serious issues currently facing the Maldives. A solution to these problems must be found without further delay. Finding solid evidence for conviction is a major problem faced by investigative authorities. We see a person who is unemployed buy expensive cars, land and property. Although people whisper in secret to each other of their wealth and prosperity, due to the lack of a legal framework to compel them to reveal their sources of income, they are able to stay hidden and benefit from illegal activities. When individuals are forced to file tax returns and details of their income and expenditure, the doors that are now open to commit crimes with impunity, beyond the reach of the law, will be closed.
Taking these matters into consideration, it is not just state revenue that will increase when the personal income tax legislation is passed into law. In addition, it will provide new facilities or means within the tax system to combat the plagues of corruption and drug trafficking. The taxation system will help to establish a strong, sound and fair state.
All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to email@example.com