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Created on Thursday, 07 December 2017 18:40
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(Edited Image Courtesy: WB & IMF)
It is time to take a stock of ground covered by the world in tax transparency within the domain of tax administrations.
Organisation for Economic Co-operation and Development (OECD)-hosted Global Forum on Transparency and Exchange of Information for Tax Purposes (Forum) released on 17th November its first report on the status of implementation of automatic exchange of information (AEOI) standard.
“With exchanges under the AEOI Standard having now commenced amongst almost 50 jurisdictions there has been a major shift in international tax transparency and the ability of jurisdictions to tackle offshore tax evasion”, says the report.
The 147-countries/jurisdiction Forum held its 10th plenary meeting over three days ending 17th November at Cameroon.
The Forum also released Plan of Action for Developing Countries Participation in AEOI (PADCP-AEOI), apart from six peer review reports. These reports take stock of implementation of Exchange of Information on request (EOIR) standard in India, Italy, Isle of Man, Denmark, Jersey and Curacao.
PADCP-AEOI claims: “The impact of AEOI has been felt in the jurisdictions which are committed to implement the AEOI Standard by 2018 even before any exchanges have occurred. As reported by the OECD to the G20, in response to disclosure initiatives and similar measures put in place prior to the start of exchanges approximately 500,000 individuals have already disclosed offshore assets worldwide, and some EUR 85 billion in additional tax revenue has been collected. The evidence is also emerging from several jurisdictions that the number of foreign financial accounts and the income from these account reported to tax authorities have increased significantly.”
Read more: Can Triple Cobweb of Info Exchange Net Tax Evaders?
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Created on Thursday, 02 November 2017 13:49
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Image Courtesy: pwc.com (Paying Taxes 2017 report)
Multilateral institutions’ (MIs’) periodic discourse on global fiscal reforms for sustained, inclusive economic growth is not resulting in concerted, collective action. One would arrive at this conclusion after going through documents released at the recently concluded International Monetary Fund (IMF)/World Bank (WB) annual meetings.
The unfortunate aspect of such MIs’ efforts is that only a fraction of the valuable recommendations contained in their reports get implemented. A case in point is a joint report by IMF and Organisation for Economic Co-operation and Development (OECD) on ‘Tax Certainty’ prepared in March 2017 for finance ministers of G20 countries.
There is hardly any concerted action by G20/OECD/IMF to make ‘Tax Certainty’ the mantra for sustained, inclusive growth of world economy. Certain countries such as the United States and India have, on the contrary, contributed to tax uncertainty.
The US is formulating a tax incentives package whose spillover impact on other countries can’t be predicted at present. India has messed up goods and service tax (GST) as symbol of botched implementation of intended good and simple tax.
Before elaborating on benefits of tax certainty, consider first the latest resolutions and suggestions. The International Monetary and Financial Committee (IMFC) has resolved that its member countries will strive to implement domestic policies that develop an adaptable and skilled workforce and enhance inclusion.
Read more: Make Tax Certainty as the Workhorse of Global, Inclusive Growth
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Created on Friday, 30 June 2017 07:04
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(Edited Image Courtesy: OECD)
The Organization for Economic Cooperation and Development (OECD) & certain similar entities want to market globalization with a human face. They want to do this by changing capitalism with socialism as the front engine of globalization train.
They want to tax more rich persons and companies in varied ways. For them, progressivity of taxation is the need of hour. This proposal has been mooted with the belief that globalization has led to reduced progressivity of taxation at the top end & created inequalities.
The trade-off between high rates of taxes and tax evasion is no longer the issue for global policy makers. Nor is the impact of high taxes on capital investment and jobs creation.
“Re-design our tax systems to reduce inequality and promote inclusive growth,” says OECD Policy Brief captioned ‘Time to Act: Making Inclusive Growth Happen’ released on the eve of two-day OECD Ministerial Council Meeting (MCM) that concluded on 8th June.
It says: “Progressive taxation is a key pillar of redistributive fiscal policy and has an important role to play in mitigating the advantages bestowed by inherited wealth and assets. The design of tax incentives also has important implications for how our economies grow and how the proceeds of that growth are shared out”.
Read more: OECD moots Tax Progressivity to fix Globalization Backlash
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Created on Saturday, 17 June 2017 08:39
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(Image Courtesy: vodafone.in)
“Retrospective tax is a matter of past. That chapter will not be opened again. We are ensuring that neither this government nor the future governments can open this chapter” stated Prime Minister Narendra Modi during January 2016.
What Mr. Modi did not disclose is that Government reserved the right to complicate and lengthen the retrospective taxation cases initiated by the UPA Government.
The NDA Government perhaps knows that it would ultimately be unable to get even a single pie through due process of law. This is because international arbitrators are unlikely to rationalize retrospective taxation, which is akin to back-stabbing businesses.
Hence muddling up retrospective taxation, for which the blame, in case, lies with the UPA.
This right to mess-up and drag the cases is being exercised with great zeal in the case of Vodafone Group Plc (VGP).
Capital gain tax (CGT) is paid by an entity that sells equity shares/property at a price higher (premium) than the purchase price. Modi Government wants to collect the same CGT from both buyer (VGP) and seller of shares (Hutchison Telecommunications International Limited (HTIL). It is thus redefining taxation!
Simultaneously, it is dragging and complicating the two-front arbitration started by VGP for settlement of CGT of Rs.112.79 billion.
Read more: Modi Govt muddle ups Vodafone retrospective tax case
