The main reason for the increase of any tax is to collect more revenue. And with the cabinet's intention to increase the tax on interest on deposits from 8 to 10 percent, this goal will not be achieved. Because interest actually goes down, and after paying off the guaranteed deposits in KTB on December 4, they will go down even more sharply, as the system will be filled with liquidity. And at low interest rates there will be nothing to be taxed with this tax. So the revenue from it will decrease even though the rate will be raised. Simple the tax base will decrease faster. In this sense, the goal of collecting more revenue will not be achieved. And also with the introduction of the tax on the interest on deposits, it was seen that it was not collected in the planned amount in any year. Because there are many ways to avoid it. Now this possibility of avoidance will be limited by the change in the interest on the deposit, but they themselves interest rates they are falling very sharply and will continue to fall. Therefore, the collection problem will continue, as there is no way to collect much money from a declining tax base.
The main problem with this one tax is that he cannot fill the budget, and raising a tax is generally not an alternative to making reforms. In the end, it will be necessary to make reforms in the expenditure part and to reduce inefficient costs and to reform the unreformed systems - health care, the Ministry of the Interior, the NHIF. In general, wherever we "touch", everything is unreformed. That's why you can't by picking up taxes to escape from making reforms.
Otherwise, the 2015 budget will still not be implemented, as happened this year. It is better to encourage saving because we are a poor country and we need funds to be invested in our economy. Foreign investments are the source of such funds, but they are few and insufficient, and we must also have our own resource, which is savings. And this tax does not work in that direction.
In Western countries, many people prefer to live on credit rather than save, while in Eastern countries, the whole culture in society is geared towards thinking about the future, and there is more savings there. We have not adopted the Western model and we have prerequisites to adopt the approach operating in successful Asian countries, namely to promote saving. It is a matter of culture and overall societal perception, but also with concrete reforms to encourage saving for long-term goals. People need to think about, for example, what funds they will have for retirement and how they will collect them. There should also be a greater savings element for healthcare. Since now and pensions and health are financed from the budget and it is seen that this model does not work. There should be a greater share of the funds we pay into pensions and health. We need a savings element under the control of the citizens and for them to see that by paying some money, they can then use it, and not, for example, going to the doctor, being asked for additional money or not having funds for high pensions after retirement. We need these social systems to be reformed and to have an element of accumulation in them, and not to spend everything month after month.