26-07-2002 12:04:00. Notícia nº 3939505

East Timor: Urging more debate, Gusmao vetoes government's tax bill

President Xanana Gusmao vetoed the East Timorese government's tax-hiking fiscal bill Friday, in his second clash this month with Prime Minister Mari Alkatiri over financial and economic policies.

Gusmao announced his veto in a nationally broadcast radio address, justifying his decision with what he said were "contradictions" in government policies of simultaneously seeking to boost tax revenues and to bolster economic activity by attracting investors.

There was no immediate official reaction from the government.

But leaders of Alkatiri's Fretilin party, which holds 55 seats in the 88-member legislature, told Lusa it was unlikely the government or parliament would substantially alter the bill.

Jacob Fernandes, the acting speaker, said Gusmao's veto was, itself, "contradictory", as it was intimately linked to the government's budget that the president signed two weeks ago.

Gusmao held the budget back for two weeks before promulgation, criticizing Alkatiri for having used his legislative majority to speed its approval in parliament with limited debate.

The fiscal bill, approved earlier this month by parliament, unfairly penalized the least privileged sectors of society and was frightening away foreign investors, Gusmao said in his speech.

He suggested belt-tightening measures to limit the need for higher taxes, such as reducing the planned purchase of a fleet of government vehicles.

"It is not my intention to push the government into a ravine", he said, adding that his only intention in vetoing the bill was to "motivate discussion" and help build a "strong and capable civil society".

Analysts in Dili underlined what they said was a lack of regular communication between the president and prime minister of the 10-week- old independent nation.

On running for president in April elections - which he won with more than 80 percent of the vote, Gusmao rejected the offered backing of Alkatiri's dominant Fretilin party, which he once led.

He indicated at that time that he wanted to be a political counter-weight to aid democratic development.

SAS/ASP -Lusa-

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