Despite plunging corporate tax rates across the world, the jury’s still out on whether there’s truly a corporate tax rate to the bottom occurring. Many have predicted the death of corporate tax in the not-too-distant-future. As I surmised on this subject recently, such claims feel somewhat exaggerated and a tad hysterical. Surely, public opinion would be so hostile to such an eventuality that governments simply wouldn’t allow it? It’s a safe argument for me; an argument that can only be settled after the next decade or three.
Nevertheless, there can be little doubt that robust competition is taking place between jurisdictions on corporate tax at present, and the recently completed tax reform legislation in the United States, which slashed corporate tax to 21 percent, has probably intensified it. It can’t be a complete coincidence that China kicked off 2018 by announcing … Read More »
“Fog On The River Plate: Argentina Cut Off!” That’s how it must seem to tormented Argentine consumers, who are gradually being incarcerated behind an impenetrable wall of fiscal constraints which effectively prevent them from dealing with the outside world. The rules governing e-commerce importations are so strict and bureaucratic that such imports will cease, to all intents and purposes. Argentinians are used to getting around their government’s pettifogging restrictions, yet even so, this is a Draconian and illiberal measure, which the government has been driven to by its own profligate incompetence. No doubt digital imports, which cannot be taxed at all, will substitute in some respects: no-one will buy a CD from the outside world any more; instead they will download the digital version of the album direct from i-Tunes or wherever, using a tablet bought duty-free on a trip … Read More »
I am trying to get my head around the announcement from Argentina that it will increase taxes on luxury goods “in order to make more money available for imports that will improve domestic output.” OK, so the Government will have more money, and the people who buy expensive toys will have less money. How is that going to increase “useful” imports? It must have to do in some obscure way with the fact that the peso (at its official rate) is grossly over-valued against the dollar and inflation is far higher than the Government admits. It won’t work, anyway: Argentines have had decades of practice at getting around official currency restrictions imposed by spendthrift governments, and are famously inventive at it. One good thing the Government did this week, at least, was to open negotiations with Repsol over compensation for … Read More »