The whole point about taxes is to raise revenue for regulatory hands off government to function, to finance social welfare for the neediest and to carry out other national-level functions. The idea is not to tax everything that moves. It is not to try and squeeze every paisa from citizens so that they have no incentive to earn and save.

But that is exactly what the government seems to want to do with a proposed new tax law; it harks back to King John in medieval England who drove his country to penury because he got his taxrn3n. the Sheriff of Nottingham, to called every last penny from every peasant. Outraged citizens couldn\'t stand it anymore and joined a band of guerrillas in Sherwood Forest under the command of that prototype Maoist, Subcommandante Robin Hood. Some provisions of a draft that may one day become our income lax law go beyond salaries and wages to even lay its hands on the properly parents leave behind far their children-treating inheritance like a sales transaction. If someone steals your car radio, you may now be taxed, since it will also be regarded as a sale.

From business it would take a cut of the income earned from everything, plus the net gains from the disposal of a person\'s business assets or liabilities, investors will pay taxes on dividends, interest, natural resource payment rent. royalty, gain from investment insurance and so on. The taxman cometh, and he wanted everything.

The idea behind this new draft is to widen (he fax net and make it easier and more transparent for those who pay it. That is not a bad goal. As World Bank economist Joseph Sliglit says in his column (on page 8 of this issue) countries like Nepal must simplify tax laws with single-rate, broad-based taxes to improve collection and reduce corruption.

As things stand, this draft law is so complicated that even the lax department admits it will need six months of training simply to understand its provisions. Imagine what the law will mean to the hundreds of thousands of taxpayers scattered all over Nepal ,How could something so important have been messed up so badly when all the underlying premises are right on target? Was it because a foreign consultant drafted it for us without having the least idea of local conditions? Or could it be a deeply-ingrained revenue-driven government ethos?

It is simple economics: countries can earn more from taxes only if more citizens earn more. People can earn more by working harder and too longer hours, and they will do that if there are more incentives to work harder. If you take away most of what they earn, they will not earn and they will not save, in its present avatar, the draft law will turn Nepalis into a nation of tax evaders like Pakistan (see page 13).

There is one last hope: Parliament. When the draft tax act comes up for debate, the people\'s representatives should retain its good points and trash the unworkable ones.