Tuesday, June 10, 2008

International News - June 10

** Also see our permanent list of past story summaries; see Offshore Watch for more stories. **

Martin Wolf on Tax Competition - again
June 6 (TJN) – FT’s Martin Wolf responds to TJN’s John Christensen on tax competition, mostly but not entirely in agreement with TJN’s views.

Nigerian politicians using tax havens
June 6 (TJN) - The well-informed insider newsletter Africa Confidential has reported on the financial affairs of James Ibori, former governor of Nigeria's Delta state and a key political contributor. Take a look at the police document from Southwark Crown Court, which is here.

On singing parakeets and tax evaders
June 6 (TJN) - Under pressure from the authorities, UBS is considering whether to divulge the names of up to 20,000 of its well-heeled American clients, according to people close to the inquiry, a step that would have once been unthinkable to Swiss bankers, whose traditions of secrecy date to the Middle Ages. A former UBS banker is in a court in Florida will, a former client said, "sing like a parakeet." See also: http://www.nytimes.com/2008/06/06/business/worldbusiness/06tax.html?_r=2&ref=business&oref=slogin&oref=slogin

Corporation taxes, growth and "tax incidence"
June 5 (TJN) - A new report from the Washington-based Center on Budget and Policy Priorities. The new report's key findings are as follows.

Time for Tax Justice
June 3 (TJN) - An important meeting on tax justice to be held in London on July 2. If you want to attend, register quickly, as demand for places is likely to be high. It features Angela Eagle MP, Exchequer Secretary to the Treasury; Brendan Barber, General Secretary, Trades Union Congress; Polly Toynbee, Columnist, The Guardian; Richard Murphy, Director, Tax Research

Revenue risk spurs rethink on common tax base
June 10 (FT) - Britain may weaken its opposition to a European Commission plan for a common corporate tax base in the hope that it would stem the tide of multinationals moving their tax domicile to Ireland, according to Brussels ­lobbyists.

Russia’s $120 Billion Elephant: Corruption
June 6 (Forbes) – Russian President Dmitry Medvedev comes to power pledging to stamp out corruption, but there are many factors that stand in his way.

Tax ‘top of EU’s Irish agenda’
June 8 (Times Online) - Government officials warn finance minister Brian Lenihan that Brussels could end Ireland’s tax breaks.

NY Fed chief urges global bank framework
June 8 (FT) - Banks and investment banks whose health is crucial to the global financial system should operate under a unified regulatory framework with “appropriate requirements for capital and liquidity”, according to Timothy Geithner, president of the Federal Reserve Bank of New York.

ECONOMY-INDIA: Foreign Money Transfers Under the Scanner
Jun 6 (IPS) - The cabinet of the ruling, centre-left United Progressive Alliance (UPA) will shortly introduce a bill in parliament to amend the Prevention of Money-Laundering Act making it mandatory for all financial intermediaries to report fund movements to an intelligence unit of the union finance ministry. Mentioning Arun Kumar and TJN.

TUC says public opposes corporate tax cuts
June 7 (FT) - Tax cuts for big companies would be strongly opposed by the public, according to a poll by the Trades Union Congress aimed at stiffening the Treasury’s resolve ahead of a meeting with multinationals about the future of the tax system. The survey found widespread concern over tax avoidance by big companies, voiced by voters of all big parties.

UK Companies do not pay a higher proportion of value added in tax
June 9 (Tax Research) - The FT has prominently reported that “Large British companies pay more in corporate taxes on the wealth they create than their competitors in Germany, France and Switzerland, a UK government study has found.” There’s one trouble with this report. It’s wrong because it is absurdly simplistic. It means that any country with a concentration of companies in sectors with low employment ratios and physical capital employed will perform well. We have both.

How the Masters of the Universe are murdering the middle class
June 4 (thisismoney.co.k) - As ordinary families face financial ruin, a new book co-written by Mail on Sunday Economics Editor Dan Atkinson argues that it's the greedy, deluded money men of the City and Wall Street who are the real villains.

The growing black economy
June 9 (Navhind Times) - The apparent reticence of the Indian Government to probe into the stashing of black money in offshore accounts belies a greater fracturing of the Indian political, economic, and social system.

(How) is Africa learning from its mistakes?
June 3 (Rodrik) - There is a useful symposium on Africa at the Boston Review. The questions are: what is driving Africa's recent growth; how sustainable is it? Is it the result of good policies, democratic governance, Chinese investment, or high commodity prices? Is it a blip, or more permanent? Collier offers the simplest answer of all: African policy makers have been learning from their mistakes.

Citizens for Tax Justice
Taxes Appear Set to Play a Key Role in Addressing the Climate Crisis in 2009; Louisiana: Nearly to Stelly and Back; New York: Setting the Stage for a Property Tax Battle; The Rich Get Richer? North Carolina Contemplates Repeal of Gift Tax; 
Report: An Income Tax is the Obvious Choice for Texas;

IRS Targets Billionaire's Lucrative Tax Strategy
June 9 (WSJ) - The Internal Revenue Service is fighting with billionaire Philip Anschutz to force the Denver-based mogul to pay back taxes totaling $143.6 million.

The hedge fund industry is big. Make that really big. Or sorta big?
June 6 (Reuters blog) - The Cayman Islands Monetary Authority (CIMA) a few years ago began requiring electronic reporting of various data points for hedge funds which are domiciled there, virtually all are offshore branches of hedge funds based in North America, London, Asia and elsewhere. Last week, CIMA disclosed the first aggregated data reported by the limited pool of 5,052 hedge funds.

UPDATE 1-Liechtenstein's VP Bank eyes $3 bln new funds
June 5 (Reuters) - Liechtenstein private bank VP Bank aims to pull in 3 billion Swiss francs ($2.9 billion) worth of net new funds from wealthy clients in 2008 as the bank grows its Asian arm to woo the region's rising number of millionaires.

South Africa: E-Mails Back Sars Case Against King
June 9 (Business Day) - LAWYERS for the South African Revenue Service (SARS) presented damning evidence on Friday, memos and e-mails from businessman Dave King's offshore bank.
In April 2001, Bougourd wrote to the bank's Adrian Fairbourn that they had devised a plan for King's assets: "We are restructuring Ben Nevis to stop the South African taxman in his tracks.

Tax-Shelter Users Get Some Rare Good News
June 4, (WSJ) - Many investors battling the Internal Revenue Service in high-stakes tax-shelter cases may take some hope from the government's defeat in a recent court case. But IRS lawyers view the decision as merely a temporary setback on the road to annihilating the badly battered shelter business. Indeed, the government has won most recent cases involving shelters.

Tax Havens in U.S. Crosshairs
June 9 (Christian Science Monitor) – With $345 billion in lost revenue, tolerance for offshore avoidance fades with the increased public scrutiny of tax havens such as Liechtenstein.

Obama calls McCain tax plans ‘outrageous’
June 9 (FT) - Barack Obama on Monday described John McCain’s proposed tax cuts as “outrageous” and said they would amount to $5,700bn over the next decade – more than double the cost of George W. Bush’s tax cuts.

Federal Police anger Vanuatu chiefs
June 6 (The Age) - Traditional chiefs in Vanuatu have accused Australian police working in the country of overstepping their authority and failing to show proper respect to community leaders. "We believe what they have done to the financial services of Vanuatu is just a slap to our tax haven system," he said, referring to the Wickenby raids.

A respite for bank secrecy (Un sursis pour le secret bancaire)
The bank secrecy war will not happen. At least not immediately, and not at the OECD, whose ministerial summit takes place in Paris this week. The attempt of a “certain Nordic country” to bring the fight against tax evasion onto the agenda has “lamentably failed”, according to a Swiss diplomat. In French.

La Suisse dans la constellation des paradis fiscaux
May 29 (Paradis FJ) - A book (in French) about Switzerland’s role in the tax haven world. With contributors including the crime-fighting magistrate Bernard Bertossa, and TJN’s Bruno Gurtner.

India, Luxembourg sign accord on curbing tax evasion
June 2nd (IANS) - India and Luxembourg Monday signed an agreement aimed at discouraging tax evasion and preventing double taxation on income of companies operating in their respective countries.


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