Functioning Better Than Many Supposed

Posted on August 24th, by Global Tax Weekly in IMF, OECD, Sales Tax. No Comments

It is to South Africa I turn to next. In 2013, the Government set up a committee of tax experts to review the country’s tax system. The overarching aim of this exercise is — in the words of the Government — to “assess our tax policy framework and its role in supporting the objectives of inclusive growth, employment, development, and fiscal sustainability.” It’s a sentence that could have been lifted word-for-word from an OECD report on tax-to-GDP ratios. But it’s actually fairly easy to translate this official-speak: for phrases like “inclusive growth” and “fiscal sustainability,” read “more spending and more tax.” Being the cynic that I am, I suspect that the Government probably set up the Davis Tax Committee, as it has come to be known, in the hope that its conclusions would help to justify its argument for certain … Read More »

I Like Chile

Posted on August 17th, by Global Tax Weekly in Corporation Tax, Economy. No Comments

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 »

One Step Forward, One Step Back

Posted on August 10th, by Global Tax Weekly in Corporation Tax. No Comments

It was so often the case, under the UK coalition Government, that Britain took one step forwards, and then one step back. Nothing seems to have changed now that the Conservative Party is governing outright. The UK has won plaudits from investors for the scale of the corporate tax cuts that have taken place since 2010, and there will be more to come over the course of the current parliament with the rate due to fall below 20 percent, which seems to be something of a psychological marker these days, separating the mainstream economies from the “tax havens.” Yet the Exchequer needs tax revenues, and needs them badly if the budget deficit is to be eliminated, and public debt, which has risen to 80 percent of gross domestic product, at last put on a downward track. Consequently, HM Revenue and … Read More »

A “Copernican Revolution”

Posted on August 3rd, by Global Tax Weekly in Corporation Tax. No Comments

Quote of the week probably should go to Italian Prime Minister Matteo Renzi, who has called for a “Copernican Revolution” for the Italian tax system. In case you’re not up to speed with your renaissance geniuses, he was the early 16th century mathematician and astronomer who shook the very foundations of the religious orthodoxy by concluding that the earth and the other planets of the system orbited around the sun, rather than the other way around. Just how Copernican theory relates to taxation I’m not sure. But I do get Renzi’s drift. Italy’s tax system has become so uncompetitive and unattractive that a paradigm shift in thinking is needed to turn things around. To kick off the revolution, Renzi has proposed a fairly deep corporate tax cut, which would reduce Italy’s total tax rate from the low 30s to the … Read More »


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