Monday, January 16, 2006

Income tax law rejected: the system works

A joint session of the finance and legal committees of the senate today recommended that the senate reject the temporary income tax law passed in the final days of the Badran government. This means that the senate will most likely strike the law from the books during its next meeting on Thursday.

Temporary laws can only be passed by the executive in dire circumstances when the parliament is not in session. The law was passed one day before the parliament was to convene, and there were no dire circumstances which necessitated passing this law. Additionally, the law was widely viewed as being regressive, aimed at the middle class, and lowering the tax burden on the rich.

The house rejected this law as well as three other temporary laws. This meant that it was up to the senate to either pass, reject or ignore the law. If it had ignored it, then the law would stay in force until the senate took action. This would have been a legal way to enforce a law with dubious constitutionality and no public support. Many thought that this was going to be the case.

What is important about this story is how this story came to such an end, and how civic action can make a difference. From the beginning, the Badran government realized that this would be unpopular, so it was passed in the way that it did. What was surprising was how the house reacted, given the climate of intimidation in which it was placed. The fact that the parliament took such a stand and was not punished should be an empowering lesson.

The press took the mantle, with Al Arab al Yawm taking the lead with continuous coverage of the story and withering commentary on the issue. Soon, the professional unions, merchants, farmers and other civic forums began discussing the issue. It should be noted that the professional unions represent a large part of the middle class targeted by this law. Traditionally, these unions were criticized for focusing on non-Jordanian causes, and ignoring the needs of their members. Not this time. The lawyers union brought action to the Supreme Court to overturn the law. This action was similar to a challenge to the press law of 1997, which was overturned on the basis that it was passed unconstitutionally. Having the Supreme Court follow its own precedent would have been quite embarrassing to the government.

So, both Marouf Bakhit and the senate began to feel the heat. They had inherited a bad cause, and had two choices: fight to the end or drop the case. The prudent decision was made. The prime minister asked the senate finance and legal committees to reject the law. These committees were inclined to do this anyway, trying to cast off the senate's image as a pawn of the government. So, this face saving outcome was devised.

The issue is not completely over. There is still an inclination to overhaul the income tax law. At least this time more input from the various stakeholders will be taken into consideration. The good news is that the system works. The bad news that only vigilance makes it work, as in any other democratic system.


At 11:29 PM, Anonymous Anonymous said...

It is incidents like this that keep those who care about the country and its citizens going. Whether it was a direct effect of the public discussions or for any other reason, it is something encouraging.

[is this optimism in my tone? boy i must have had one drink too many last night]

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