When it comes to economic and tax developments, Ireland doesn’t do half measures. Most countries are accustomed to riding the ups and downs of the economic cycle, but Ireland has made the experience something of a rollercoaster, from the roaring Celtic Tiger economy of the 1990s and 2000s, to the country’s near-bankruptcy at the nadir of the global financial crisis when, at one point, the Government reported a budget deficit in excess of 30 percen of GDPt.
You might have thought that this stomach-churning ride through boom and bust might have tempered ambitions and expectations in Ireland. But not a bit of it. In 2015, GDP was estimated to have grown by a massive 26 percent, although that figure was, it turned out, greatly distorted by a few large assets transfers connected to corporate inversions by US multinationals.
Nevertheless, the economy has … Read More »
To give Rudyard Kipling’s immortal words a 21st century spin, if you can keep your head while all about you are losing theirs and blaming it on you, you have something in common with Theresa May, the British Prime Minister.
For sure, if reports are to be believed, there is some bungling afoot surrounding how the British Government appears to be handling Brexit – if there is a plan, it sure is keeping its cards squeezed tightly to its chest. I suppose May does deserve some credit for keeping her cool while tasked with arguably the UK’s biggest challenge since de-colonization.
But maybe May has been keeping abreast of recent tax developments and seen the recent news that, despite the UK’s decision to leave the European Union, Snapchat has chosen to establish its non-US base in London. The announcement comes hot on the heels of … Read More »
There isn’t room here to consider the political, financial, economic, legal, and diplomatic implications of the Brexit for Britain, the EU, and the world. In any case, this being such an unprecedented and historic event, nobody without shamanistic powers knows what the future holds, and even the most visionary of soothsayers will struggle to tell you how it will all pan out. What we do know is that the EU, for all its manifold faults, is generally liked by multinationals because of the single market and the relative certainty that it offers. And they like Britain in particular because of its EU membership, low corporate tax, flexible labor market, and relatively light regulation (in comparison to other member states at any rate). Hence, a great many of them urged Britain to remain. Time will tell how these multinationals will continue … Read More »
Belgium has had a bit of a bad rap recently, having been very publicly rebuked by the European Commission for allowing some multinationals to pay not very much tax; it could do with a bit of a pick-me-up. So Belgium, congratulations on finally coming to your senses and recognizing the flaws in the insane EU financial transactions tax proposal.
When you think about it, the very reason why we’re having the debate about corporate tax avoidance is because of the bankers. When everything was going swimmingly, in the Halcyon days before the financial crisis, fewer people seemed to care how much tax big companies were paying, or, to be more accurate, the media wasn’t that interested in the subject so people didn’t read or hear about it as much. Now, it sticks in the throats of many that ordinary taxpayers are … Read More »
Chile is one of those pleasingly unconventional countries. For a start, it must be the most bizarrely shaped nation on the world atlas. Resembling a fully uncoiled snake, it spans almost 2,500km of South America’s Pacific coastline, yet is only 170km wide on average. But Chile is far more than just a strip of dry desert wedged between the Andes and the ocean. While countries like Brazil and Colombia bathe in the limelight with their membership of the BRICS and CIVETS clubs of top emerging economies, Chile has quietly got on with the business of growing its trade and economy. The country has been fully democratic for over 20 years, and sound economic and fiscal policies have given it the highest sovereign debt rating in the region. Chile has 22 trade agreements covering 60 countries, and exports now account for … Read More »
So what was the point of all that then? I refer of course to the humiliating conclusion for Greece in its attempt to renegotiate its bailout terms. Almost unbelievably, after six months of deadlock and brinksmanship, Athens has seemingly managed to secure itself worse terms than those it originally protested against, and significantly worse ones than were on the table just a short while ago.
I keep reading and hearing in the media that Greeks will be subjected to harsh new tax rules as part of the agreement. It’s certainly true that the screw will be turned ever tighter on tax evaders. However, the statement summarizing Greece’s obligations, which was released after the Euro Summit on July 12, barely mentions the word “tax.” In fact, taxation is referred to twice, and both references are vague in the extreme: streamlining the VAT … Read More »
There are numerous annual studies attempting to rank nations in terms of how attractive they are to do business in, and Australia fares well in several of them. For example, the World Bank’s most recent Doing Business Index, which, as its name suggests, ranks economies on the ease of doing business, puts Australia in 10th place out of 189 countries. The Heritage Foundation/Wall Street Journal Index of Economic Freedom, which measures the strength of a number of economic and other rights in 178 nations, places Australia a very creditable fourth. However, when it comes to comparing Australia’s taxes with the rest of the world, the Lucky Country fares less well. According to PwC’s Paying Tax Index 2015, Australia languishes in 39th place out of 189, with a total tax rate on an average business pushing 50 percent. To be fair … Read More »
Colombia’s recent economic track record is quite remarkable given the internal strife that continues to blight the country. Large swathes of rural Colombia remain no-go zones for those not affiliated with the FARC guerrilla movement, which the Government has been battling (literally) for 50 years. Yet, the economy has been growing at a very respectable four percent a year for the past four years, stretching a trend of unbroken economic growth which has lasted a decade. Colombia also attracted record levels of foreign investment last year after all three international credit rating agencies upgraded the Government’s debt to investment grade. Not bad for a country seemingly in a perpetual state of civil war. It’s also pretty impressive when you consider how bad the country’s tax system is. As the OECD pointed out recently, the combined statutory corporate tax rate of … Read More »
Nobody is pretending that Spain is out of the woods yet after getting sucked into the eurozone crisis. But the way the economy is performing compared to the rest of the eurozone suggests that the Government must be doing something right in the area of economic policy. Last month, the Bank of Spain said that improving domestic demand was helping to sustain a recovery, and that the eurozone’s fourth-largest economy would grow by 1.4 percent in 2014 and possibly by as much as 2 percent in 2015. Given anemic growth elsewhere in the eurozone, especially in France (predicted 0.5 percent growth this year) and Italy (probably even slower 2014 growth than France) – the second and third-largest economies in the single currency area – it almost looks like boom time in Spain. Why is this the case? Well, economies are … Read More »
Another good day for an elected chamber was had in the United States Congress last week after the House of Representatives voted overwhelmingly in favor of ”dynamically scoring” major new tax legislation. In essence, dynamic scoring means that the likely economic consequences of tax reforms are factored in to calculations on their future revenue effects. Almost unbelievably, the Congressional Budget Office and the Joint Committee on Taxation currently use “static” revenue estimating techniques, which make the assumption that tax policy changes – regardless of their magnitude – have no impact on the economy’s performance. Under such an assumed scenario, tax cuts are inevitably going to lead to falls in revenue, which is perhaps one of the major reasons why it has become virtually impossible for Washington to have a sensible debate on the issue of tax reform. Any measure put forward by … Read More »