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Hardly setting a great example

Kitty Miv, Editor
08 April, 2019

Doubtless, there are many people who think it's a bit rich for presidents, prime ministers, and premiers to lecture us about our responsibility to the environment when they arrive en masse to climate conferences in private jets and largely empty Boeing 747s.

Perhaps the same could be said of the 53 leading global tax administrators who turned up in Chile last month to discuss a range of international tax policy issues under the banner of the OECD's Forum on Tax Administration. Travel allowances and deductions for ordinary taxpayers are often rigorously enforced by the taxman. Yet here's the heads of dozens of tax authorities having a jolly jaunt down to Santiago, not the world's most accessible capital city, presumably on the taxpayer's tab! Hardly setting a great example, is it?

One key item on the agenda was tackling the challenges of digital transformation. And in terms of the tax challenges of the digital economy, this is certainly proving to be a tough nut to crack. However, in terms of tax administration, maybe tax administrators should be using the digital transformation to their and taxpayers' advantage. Have they not heard of teleconferencing? That would have saved a few business class seats – and business cards.

Still, not that many people would have taken notice of the FTA conference. The world is currently consumed by Brexit, which is currently playing like a movie for which someone forgot to write an ending. And now the actors are forced to make it up as they go along. This can make for some compelling viewing, if only for the spectacularly arcane and knockabout nature of UK parliamentary practise. Order! Order! This Honorable Lady must and will be heard! No wonder parliaments are full of lawyers. Not even a Nobel Prize-winning genius would be able get their head around legislative procedure in many countries.

As I write, we're still largely none the wiser about the UK's future relationship with the EU. But if there's one conclusion that can be drawn from all this, it's that the Mother of Parliaments might be ready for a makeover. The British constitution, largely unwritten, and famous for its flexibility and adaptability, has coped with many past national emergencies. But it's no exaggeration to say that the constitution's elasticity is being stretched to breaking point by Brexit. What's more, it's difficult to know who's in charge now – the Government? MPs? Speaker Bercow? The Downing Street cat? Anyone? No-one?

Understandably, now is not really the right time for Britain to have a debate on constitutional reform, given that the nation is already in the throes of a collective nervous breakdown. Such a thing would also be a turmoil too far for taxpayers, many of whom, I hear, are beyond caring what sort of Brexit they get, as long as they know what the tax rules will be on cross-Channel business operations from March 29. Or is it April 12? Err, May 22? 2021?

Businesses were therefore likely to have taken cold comfort from the European Commission's announcement that its preparations for a "no-deal" Brexit are complete. Employing almost Bercow-esque language, the Commission said that the EU's contingency measures "will not – and cannot – mitigate the overall impact of a 'no-deal' scenario." Nor, we were told, do these preparations "in any way compensate for the lack of preparedness or replicate the full benefits of EU membership or the favorable terms of any transition period." Well, that's reassuring then.

Indeed, businesses, it appears, are on their own. For, according to the announcement, it is up to citizens and businesses to continue "informing themselves" about the consequences of a possible no-deal Brexit. That could, I posit, be quite difficult, given that right now nobody knows for sure what these consequences are going to be. Seems the Commission has misunderstood the definition of "preparedness," and of "helpfulness."

I like Hungary's approach though. There the Government has decided to take everybody's mind off the whole wretched affair by announcing tax incentives for procreation. To be more specific, mothers who bear at least four children get out of paying income tax. Then again, I'm not sure who gets the best part of the bargain here – the husband or the wife?

The UK has the "bedroom tax." Perhaps this is the opposite.

Tags: Euro

About the Author

Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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