Pricing of Public Resources for sale or lease to Private Parties should be vide a proper auction process that protects the interests of the Public. Taxation should be fair, comprehensive and equitable.
All Goods and Services are not the same. Some are Enablers whose consumption enables greater production of other Goods which in turn lead to additional GST. Such Enablers need to be looked at, taxed or auctioned differently.
Quotations for consideration:
It should be the aim of any Government to arrive at a pricing and taxation policy for all Goods and Services that takes into account the difference in the nature and purpose of each and, is directed so as to equitably deliver the maximum benefit to the public and, not just to generate the maximum, immediate or short-term, tax revenues to the Government, even if it then claims to use such revenues only for public good. A benefit that can accrue to the public directly is far more equitable and effective than that which is first pooled into the Government’s ‘sticky’ hands and then re-distributed. The Government’s need for tax, like its bureaucracy, will otherwise be ever growing and there exists a strong and undesirable correlation between them.
A benefit that can accrue to the public directly is far more equitable and effective than that which is first pooled into the Government’s ‘sticky’ hands and then re-distributed.
Consumers tend to spend relatively less on goods and more on services as their incomes rise. Once people have met their basic needs, they tend to want better medical care, transportation and communication, information, recreation, entertainment, financial and legal advice etc. Services including design, flexibility, innovation and smartness are steadily substituting for materials in our manufacturing, exports and trade.
All types of Good and Services cannot be considered as being similar. They fall under three categories. The first category includes those that are consumed or used as end or final products itself divided into ‘staples or essentials’ and others, while the second category includes those that are intermediate products and services consumed in the production of such end products and finally, in the third category are the enablers, those which act as something like catalysts for, or are the essential inputs for, increasing productivity and generating greater employment and thus leading to greater tax collection.
The Goods and Service Tax (GST) system is a very efficient, effective and equitable system for the first and second category of Goods and Services. The more one buys or consumes such items, the more one pays as tax. The rates of such taxation can be used to direct consumption in the appropriate direction in case of addictive and health affecting items which result in a greater burden on society. The tendency to use the tax policy to affect other ‘flavour of the day’ demands (to modifying eating habits or to enforce environmental conditions etc) should be strongly resisted as it may otherwise soon lead to cascading demands for other causes supported by the ever increasing number of self interested groups or NGO’s.