Tuesday, 28 September, 2021

Pay Tax, Demand Welfare And Accountability

Kamal Parajuli


Instigated by the recent demise of family members, fraternity from the movie industry have been lamenting about the sorry state of infrastructure and accountability in Nepal. Being celebrities, their plight got highlighted. Otherwise, Nepalis of all classes have had a harrowing experience with COVID-19 as it goes on a rampage, unchallenged. However, the callousness of the state is because of our indifference to the political system that governs us. And to the belief, private wealth can cover for absence of the state.

Fury of nature
The faith might have some solid backing. Even natural calamities that strike randomly are not without bias. Analyde the aftermath of catastrophes and you will find they love to claim those who already were struggling to meet their ends. It is bizarre the fury of nature whose only objective is to obey the law of physics is itself so selective.
Lightning kills around 100 Nepalis each year. Most of the victims are villagers ploughing their fields or grazing their cattle. Yet, people traveling in a car will largely remain safe because the enclosed metal structure acts as a Faraday cage and will direct electric current toward the outside and into the ground in case of a strike.
In 2019, a tornado pulverised villages in Bara and Parsa killing 28 living in loosely built mud houses. However, those with brick-and-mortar homes were left relatively unscathed. Similar are the stories when flood arrives or earthquake rattles.
Well-off rush to expensive private hospitals for treatment. And those who succumb to diseases are poor souls who cannot receive timely attention in crowded government hospitals. Or the ones from far-off villages who have no medical facilities in sight of three walking days.
The state is supposed to develop infrastructures and provide public goods. But roads are patchy. It has constricted the flow of goods and people and stifled economic activities. Public schools have lost credibility. And expensive private schools have proliferated. Public hospitals are in shambles. And people have to rely on costly private clinics. Public transport is non-existent. And people have to buy personal vehicles leading to notorious traffic.
So, affluents have been managing without much dependence on the state. And the impoverished ones have been leaving survival to fate with no hope of intervention from the state. Unfortunately, these sorts of experiences instilled a dangerous notion that the state is irrelevant other than to collect tax. And the indifference awarded latitude to political leaders to act without accountability. It was a suicide which society would come to realise.
Not all disasters strike with premediated consequences. COVID-19 has been a dark swan – any new disease would be. Nepal was singularly unprepared. There are still no labs to sequence the genome of microbes. It has left the population vulnerable as it takes months to diagnose the cause if a new virus sweeps in. Besides, hospitals either had not installed oxygen plants and ventilators or had left them out of order.
If COVID-19 had been an isolated event, then well-off would have rushed to Delhi, Bangkok, or Singapore. Being a global pandemic, it turned out they were fighting their own battles. So, Nepalis, be rich or poor, had to do with the facilities available in Nepal. Then came the realisation wealth alone does not guarantee survival. Distressing reports of patients begging for oxygen cylinders, ventilators, and lifesaving drugs were all too common.
Helicopters ferried COVID-19 patients to Kathmandu for excess of Rs. 300,000. There was a sorry tale about a person willing to fork a million to reach a hospital. The confluence of dysfunctional state and global health crisis rendered marginal value of personal wealth zero while setting a massive premium on a functioning state. Be wealthy or destitute, pandemic has taught us, among many things, the need for a robust, fair, accountable, and responsive state.
However, the sorry state of the state is because of our staying indifferent to policymakers. Any transformation begins with electors. Despite being a democracy, are we in a position to demand delivery from our elected representatives? 
Just look at your neighborhood, all the mansions, SUVs. But how many of them regularly pay income tax? The slogan “no taxation without representation” could be repurposed to “no taxation, so no representation.” Maybe the latter has been defining our psyche and debauching our morale.
The government of Nepal expects to raise Rs. 215 billion in income tax for the fiscal year 2020/21. That roughly translates to Rs. 7,200 per Nepali. Given Rs. 1.3 trillion in annual imports and a daily-minimum turnover of over Rs. 4 billion in stock exchange, average tax collected is preposterous. Surprisingly, only a few from family-owned business groups make it into top taxpayers. First, we need to redefine our relationship with the state: Declare income, pay tax and hold the state accountable. Acquire legislators’ phone numbers and call them: repeatedly. Demand welfare and an equitable society.

Status symbols
On the other hand, the state could make filing for tax returns mandatory. Link bank account with Permanent Account Number (PAN) and mandate salary payment for all organised sectors through banks. Personal vehicles are coveted status symbols that people cannot refrain themselves from buying. Make tax certificate mandatory for such purchases.
Broaden tax net but increase tax exemption from paltry Rs. 400,000. It is breaking salaried individuals back. Instead raise capital gain tax and implement inheritance tax. Strive to integrate the operatives of the shadow economy. Their vehicles, their kids’ schools, their neighborhoods generate signatures of their income. Also, glamorise filing tax returns and stigmatise evasions.
Armed with the transformed attitude that we are responsible citizens who finance government expenditures, citizens should demand welfare from the state and accountability from legislators. Health, education, and public transportation generate massive positive externalities. As such, free-market underproduce them. And the government has to enter those sectors by providing affordable healthcare, quality education, and reliable transportation. Then only underprivileged ones can hope to live, prosper and contribute back to society. And so do the privileged ones – at least during uncertain times when their wealth becomes superfluous.
After all, any flickers of hope during the crisis emanated from state-run hospitals which provided free or subsidised care. Salute to those diligent doctors and nurses who worked selflessly round the clock. Until next time.

(Parajuli works with Himalayan Bank Limited. kamal.parajuli@himalayanbank.com)