International Taxpayer Leaders Forum Newsletter, N.26 – March 16, 2015

Section: Taxpayer Leaders Forum
19 March 2015


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North America
Feds Launch Internet Sales Tax Again, So Better Click While You Can
Naming bills in Congress often involves a hook, some wishful thinking by legislators. For example, the Affordable Care Act has turned out to be expensive, with a surprising number of Obamacare taxes, some explicit, some hidden. As the Supreme Court once again pours through ACA to see what’s inside of it, as tax filing time approaches there could be a backlash. Continue Reading

Scott Walker’s Pen Makes It 25 States Where Workers Have The Freedom To Choose
With Gov. Scott Walker’s (R) signature today on right-to-work legislation recently approved by the Wisconsin House and Senate, Wisconsin becomes the 25th state in the nation to prohibit coerced unionization and give workers a choice as to whether or not to join a union. Despite outbursts from Democrat politicians and union bosses, Wisconsin taxpayers and the state’s economy will benefit from becoming a right-to-work state. Continue Reading

Why Does Jeb Bush Want to Raise Your Taxes?
The 2016 presidential race is barely underway, and one of the early controversies surrounds former Florida governor Jeb Bush’s refusal to sign the Taxpayer Protection Pledge.  Not only will Bush not sign the tax pledge, he has in the recent past enthusiastically endorsed a tax increase as part of a “grand bargain” with Democrats. Continue Reading

If You Want Good Fiscal Policy, Forget the Balanced Budget Amendment and Pursue Spending Caps
Back in 2012, I shared some superb analysis from Investor’s Business Daily showing that the United States never would have suffered $1 trillion-plus deficits during Obama’s first term if lawmakers had simply exercised a modest bit of spending restraint beginning back in 1998. Continue Reading

CRTC backs off ‘Netflix’ tax
The federal broadcast regulator says it is relaxing Canadian content requirements on traditional TV networks to put them on a more even footing with new media giants, including YouTube and Netflix. Continue Reading


Europe/ Eastern Europe
New tax burden for UK homes owned by company or partnership
New tax rules which come into force next month in the UK could leave some home owners with a bill of £7,000 if their property is partly or wholly owned by a company or partnership. Continue Reading

European Parliament Votes to Cap Credit Card Processing Fees
The reformed legislation would cap fees for credit cards at 0.3% of the transaction and debit cards at 0.2%, and will also give merchants the opportunity to accept only consumer cards if they choose. The European Commission reports a potential savings of €6 billion (euros) or $8.43 billion in U.S. dollars for retailers in hidden fees, as well as a €730 million savings for consumers. Continue Reading

French tax on Britons’ second homes illegal
France has lost its tax war against British second home owners after the European Union’s top court deemed it “illegal” to force them to pay social charges on gains from renting or selling their properties. Continue Reading

EU probe poses fresh threat to our 12.5pc corporate tax rate
Ireland is facing a fresh threat to its 12.5pc corporate tax rate, as MEPs begin investigating low rates across Europe. A 45-member EU Parliament Tax Inquiry Committee, formed in the wake of the Lux Leaks scandal, has been tasked with investigating various tax arrangements in countries across Europe. Continue Reading

Greece proposes undercover tax inspectors
The FT has published a letter which (it says) the Greek finance minister has sent to Brussels officials ahead of Monday’s eurogroup. The letter outlines seven reforms including improving tax collection and the public finances, and addressing Greece’s humanitarian crisis. It also suggests that talks should begin on a “possible follow-up arrangement”.Continue Reading

Ukrainian agriculture moves to general VAT taxation from 2016
The memorandum on Economic and Financial Policies agreed by the Ukrainian government with the International Monetary Fund (IMF) envisages depriving the agricultural sector in Ukraine of the beneficial VAT taxation regime. Continue Reading


Tax hike hurts competitiveness of Brazilian IT firms
The competitiveness of Brazilian IT services industry is at risk as the government is more than doubling social security contributions that sector companies have to pay. From June 1, a new measure will remove 70,000 companies from 56 industry sectors, including IT, from payroll tax breaks as part of a set of actions to shore up the Brazilian government’s budget. Continue Reading

U.S. Aid Empowering Organized Crime in Mexico
Two weeks ago I had an article in The National Interest where I made the case against the Obama administration’s proposal to deliver hundreds of millions of dollars in aid to Central American governments to help them fight organized crime, promote security and foster economic development. In my piece, I wrote that “…giving $1 billion to governments with dubious records on transparency and human rights will empower corrupt officials to the detriment of ordinary Central Americans.” Continue Reading

Will the Venezuelan Opposition Fall into UNASUR’s Trap?
A new political crisis is brewing in Venezuela as the economy continues its free fall, social unrest grows, and the government escalates its crackdown of the opposition. Two weeks ago, the mayor of Caracas, Antonio Ledezma, was arbitrarily arrested under spurious changes of planning a coup. Other leading figures of the opposition are being targeted by Nicolás Maduro’s regime and could be detained at any time. Continue Reading

Argentina considers income tax change in pay talks with unions
Argentina’s government is considering raising the minimum threshold on income tax as a sweetener in salary talks with trade unions to avoid unruly protests in the run-up to October’s ‘s presidential election, a senior government official said. Continue Reading

Democracy to the rescue?
When Dilma Rousseff, Brazil’s president, delivered a televised speech to mark International Women’s Day on March 8th, it was almost impossible to hear her in some districts. Thousands of middle-class Brazilians drowned her out by banging pots and pans, a traditional way to show dissent in neighbouring countries. Brazil’s panelaço is new. Continue Reading


Russia’s Budget Deficit Widens in Feb as Tax Returns Fall
Russia’s budget deficit more than doubled in February, the finance ministry said, amid a drop in oil prices and Western sanctions that are sending its economy toward recession. Continue Reading

Kazakhstan Is The New Black
The entire investment community overlooks countries like Kazakhstan in favor of countries that they know more about, such as Europe (debt ridden), China (overhyped), and Japan (one foot in the grave). But if you look at where capital is going, you will see that this country is where a not insignificant amount of capital is now flowing. A word of caution to all of you out there who think I’m giving out free investment advice. I’m not. Investing in Kazakhstan is not for the weak-hearted – so be sure to do your own research. Continue Reading


Middle East/Africa
Agreement on tax harmonisation vital
He was at the East African Community headquarters in Arusha advising his listeners on the wisdom for working in tandem when it comes to regional tax issues. Partner states have been talking quietly and carefully over the issue, but it is extremely sensitive. In most cases each country is doing its own thing, especially tax incentives. Nahana said there are limited avenues to query the decision of finance ministers to exempt individual business people or companies. Continue Reading

Kenya Double Tax Agreements With South Africa And Mauritius
The treaty between Kenya and South Africa that was signed in November 2010 was ratified by Kenya in October 2014, following earlier ratification by South Africa. The Mauritius treaty, signed on 7 May 2012, was ratified by Kenya in May 2014. Despite the ratification by Kenya, the final step required to bring the treaties into force (a notification by each contracting state to the other of the completion of the procedures required by its law for the entering into force of the treaty) was not completed by Kenya by 31 December 2014.Continue Reading

MENA’s Misery Indices, a Story of Economic Failure
In my misery index, I calculate a ranking for all countries where suitable data exist. The misery index — a simple sum of inflation, lending rates, and unemployment rates, minus year-on-year per capita GDP growth — is used to construct a ranking for 108 countries. The table below is a sub-index of all Middle East and North African (MENA) countries presented in the world misery index.Continue Reading

World’s lowest tax rates make UAE and Qatar go easy on your pocket
The UAE’s status as a tax heaven has been strengthened further as the country has the least demanding framework and the lowest average total tax and time to comply in the world, according to a global consultancy. Continue Reading

Asia/Southeast Asia
Tax-free shops in Japan seen topping 10,000
Japanese stores exempting foreigners from the consumption tax are projected to number more than 10,000 next month, hitting a government target five years early. Continue Reading

Corp tax cut will make India competitive: Revenue Secretary
The proposed reduction of corporate tax rate from 30 per cent to 25 per cent over four years would make India competitive among ASEAN countries and attract more investments, Revenue Secretary Shaktikanta Das said today. Drawing a comparison, he said the corporate tax rate was 25 per cent or less in other ASEAN nations, which were India’s main competitors. Continue Reading

Japan’s Cautionary Tale for South Korea
The Bank of Korea has no shortage of diplomatic ways to explain yesterday’s surprise rate cut, including weak domestic demand, sluggish business investment and anemic exports. But it’s worth being clear what this move was really about: Japan. Continue Reading

Vietnam strives for big tax reform
Under Ninh’s instructions laid out in a recent tax review meeting, all tax departments must continue reviewing and minimising paperwork to create favourable conditions for taxpayers.

The Government is strongly determined to implement online tax declarations, as Vietnam is one of the countries that spends the greatest amount of time on tax procedures, with 872 hours spent annually for each small and medium-sized enterprise, according to Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consultancy Association (VTCA). Continue Reading

China’s legislators divided over how to impose property tax, says scholar
Opinion within China’s central government is divided over the issue of property tax, says a former senior government public finance scholar. One group of legislators backed imposing payments based on the size of properties, while the other wanted people to be taxed on the number of properties they own, said Jia Kang, a former director of the Ministry of Finance’s Research Institute for Fiscal Science. Continue Reading


The future of tax reform in a shifting world
Tax reform in Australia has slowed to a snail’s pace. Five years on from the Henry tax review barely any of the 138 recommendations have been fully implemented (lifting tobacco excise is the most notable) and none of the hard ones, such as restructuring taxation of savings and superannuation and cutting company tax. Continue Reading

NZ online shoppers may face bigger GST burden
Online shoppers could soon be paying GST on more internet purchases. At present, GST is not charged on imported digital products such as music, films and games that are downloaded or streamed from overseas and cloud software services that are hosted abroad. Continue Reading

Too early to make tax changes for bitcoin in Australia: Treasury
The Australian Treasury Department’s Kate Preston has suggested that it is too early into bitcoin’s development in Australia to make changes to the tax laws around the cryptocurrency. Preston, who is general manager of the department’s Revenue Group, and in charge of advising the government on revenue and taxation policy matters, told a Senate Committee inquiry into the local treatment of digital currencies that the current tax treatment would suffice while the likes of bitcoin are still in their “infancy”. Continue Reading

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