Government negotiates deal with tax protestors

The government of Niger has struck a compromise deal with a civic movement that brought the nation to a standstill with a series of strikes and demonstrations to protest at a new tax on food and essential services. The agreement, signed on Tuesday night, exempts flour and milk from a new 19 percent value added tax (VAT) on food. It also establishes a higher ceiling on water and electricity bills before VAT can be applied to them. The deal was reached after four days of talks between the government of this mainly desert West African country and an alliance of 30 civil society groups calling itself The Coalition Against Costly Living. The introduction of VAT in the January budget came at a time when Niger was grappling with serious food shortages caused by poor rains and a locust invasion during the second half of 2004. This was already pushing up food prices before the new tax was introduced. Many people expressed relief that the government had agreed to give ground to the protestors, but some expressed concern that it would still be difficult to persuade shopkeepers to cut their prices. "It is a good thing that the government decided to go back on its decision," said housewife Halima Moussa. "Now we need an information campaign to make it really clear to retailers that they have to bring down their prices." The government justified the introduction of VAT, which was forecast to increase tax revenues by seven million CFA francs (US $14 million) per year, by saying it brought Niger into line with other member states of the West African Economic and Monetary Union (UEMOA). All share the CFA franc as their common currency. However President Mamadou Tandja soon found himself on a collision course with the Coalition Against Costly Living which staged its first mass protest against the new tax on March 15. His government arrested five leaders of the protest movement and charged them with plotting against the state. It also closed down a radio station which broadcast the protestors' demands. But still the demonstrations and one-day general strikes continued. Finally the government decided to negotiate. The leaders of the protest movement were released from prison last week and Radio Alternative, a private radio station which broadcast their demands was allowed back on the air. Tuesday's deal to end the confrontation in this poor country of 11 million people came after four days of negotiations. The government said it would attempt to recoup the shortfall in tax revenues arising from the concessions it had made through a series of other measures, including a crackdown on rigged government tenders and tax evasion. The United Nations classifies Niger as the second poorest country in the world. About 60 percent of its 11 million people livie on less than one dollar per day. The government has warned that 3.6 million people in Niger could suffer food shortages in 2005 as a result of last year's poor harvest.