Other recent
entries in this blog:
31 August 2008
A New Lord Of Taxation
Arise, M Sarkozy-Colbert, you have joined the immortal Pantheon of Princes
of Taxation.
What is it with the French and tax? They just can't seem to leave the economy
alone for more than five minutes.
Although they are not the highest taxed country on earth - the lugubrious Scandinavians
occupy the top spots - the French are well up there at number four. In 1965
the government took just 35% of GDP (high, for the time). By 2003 they had reached
45%, and any moment now they will top 50%.
M Sarkozy hardly lets a month go by without proposing a new tax. This year
alone we have had the RSA (Revenue Solidarite Active), a global windfall tax
on oil companies' profits, a tax on internet connections, mobile phone usage
and a levy on the advertising revenues of commercial television stations, increased
taxes on the use of materials currently contributing to global warming, and
an increase in the tax on stock options.
After last week's announcement of the RSA, business chief Laurence Parisot
said: "You can't just increase taxes - or add new ones - every time you need
to fulfill a new objective. If we add up everything that has been decided by
the government in recent times, there's ground to get worried."
But they have cloth ears at the Elysee.
10 August 2008
Taxpayers: 1; India 0
India's reported near-50% growth in direct tax collections so far this year
is a stunning figure indeed, but has to be seen in context: tax collections
in total amount to a mere 10% of GNP, and of that about 40% is made up of direct
taxes. So the increase represents about 2% of GNP, and last year's fiscal deficit
was 7%, the lowest it has been for a while. The government isn't going to be
swimming in rupees just yet!
Robust growth in direct tax collections is a result of tax education and compliance
mechanisms put in place by the Income Tax department, says the Ministry of Finance.
That is no doubt the case; but an even more stunning figure is that fewer than
5% of Indians pay tax at all.
India is handicapped by one of the world's most entrenched and labyrinthine
bureaucracies, as anyone will know who has had dealings with officialdom. In
addition, India is a federal state, with all that implies for internecine warfare
between the central government and provincial governments, particularly as regards
tax collection.
Imagine being at the helm of a ship: you turn the wheel, but nothing happens.
After a few minutes you send a petty officer to find out what's going on. 'Oh',
he reports when he comes back, 'They don't want to go to port today, and anyway
they're having tea right now.' That's what it's like to be the Indian Finance
Minister.
It's that 5% figure which really matters, and that's one of the reasons the
central government is trying so hard to impose a nation-wide Goods and Services
Tax, which will create tax-paying relationships between the state and the swarms
of traders who can currently play ducks and drakes with the balkanized provincial
VAT system. It's a mighty task.
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Latest
25 entries from all other blogs:
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Offshore Banking: Failure to Open a Bank Account
29 August 2008
How to Avoid Envy by Keeping a Low Profile
21 August 2008
High Yield Offshore Investment Programs: Do They Exist?
20 August 2008
Blacklisted Offshore: Private Consultant's Opinion
18 August 2008
Why taking a vacation can improve your health – and wealth!
17 August 2008
Alphabet Soup
11 August 2008
Your Ships Come in Over a Calm Sea
07 August 2008
While Offshore Banking Giants are in Trouble
05 August 2008
Microchips with Everything
27 July 2008
Don't Play Poker With Uncle Sam
25 July 2008
Is Dominica Good for Your Offshore Business?
25 July 2008
How to Leverage Offshore E-Commerce in Your Existing Business
16 July 2008
Is there a trade-off between Freedom and Security?
11 July 2008
Return of Capital is More important than Return on Capital
04 July 2008
Thoughts on Investing in Panama
27 June 2008
Why Offshore Banking Privacy is More Important than Ever
17 June 2008
You Really Can Physically Create Wealth Offshore: Part 2 of 2
11 June 2008
You Really Can Physically Create Wealth Offshore: Part 1 of 2
03 June 2008
The Freedom to Create Real Value and Wealth in the Offshore World
20 February 2008
Panama Today, Tomorrow And Always
02 December 2007
Please Turn Out The Lights As You Leave
07 October 2007
How To Learn To Love Accounting Standards
23 September 2007
Caveat Emptor?
16 September 2007
No More Fat Cat Investments For Me!
26 August 2007
To Buy Or Not To Buy?
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