Financial Daily from THE HINDU group of publications
Saturday, Oct 05, 2002
Columns - Detaxfication
The Italian connection
THERE is somebody like Mr Jaswant Singh in Italy, its Prime Minister, Mr Silvio Berlusconi. He engaged his Cabinet in an all-night meeting to hammer out more than seven billion euros in income-tax cuts, that would largely benefit those earning less than 25,000 euros a year. That is, 28 million Italians, or half the country's population. "There will be many Italians who will have more money to spend," Mr Silvio has said, borrowing a line from Mr Jaswant. But sceptics say that the little that the man in the street would receive could be taken back immediately by cuts to services caused by the freezing of payments to local authorities.
We may not have that problem, because the more that our FM promised is yet to reach our pockets.
IT IS almost a year since the UK scrapped `betting tax', in what seemed to be a revenue-losing strategy. But the `gamble' has paid off and the odds have favoured both the parties, the government and the punters. Bookmakers are happy because they have saved what they would have otherwise paid as tax, and the government benefited by an 80 per cent rise in betting industry's taxable turnover. According to a leading player in bookmaking, Ladbrokes, the industry is worth about 13 billion pounds.
But every time our FM throws the dice, we seem to be hitting snakes rather than ladders.
CHINA, a country known for its `Red Army', is now battling with the problem of `army of jobless'. State-run companies have laid off many workers, thus adding to the ranks of unemployed that stands officially at a sedate 3.6 per cent. Now, the Government has announced a novel tax break to tackle unemployment. New firms can receive tax benefits if they employ workers laid off by state-run companies. The sop would be in the form of lower business and income taxes for a fixed period if the bulk of their employees had lost jobs with state-run companies.
Wonder whether somebody would think of such a scheme for the VRS retirees in India.
THAILAND'S tax system is known for its too many leaks. Which is why the Thai Tax Minister, Mr Suchart Jaovisidha, is keen on plugging all the holes. And he is seeing results: there is a 12 per cent jump in revenue collection; excise duties have grown by 150 per cent. To curtail the arbitrariness and opaqueness in the country's customs department, Mr Suchart sacked more than a score customs officials on complaints of `kickbacks to expedite clearances'. Hundreds of computers have been added to assist tax collectors, and help integrate the fragmented internal revenue, while incorporating more internal checks and balances. Thousands of `book-combing officials' have been pressed into service and their sleuthing capabilities honed through crash courses on transfer-pricing polices.
Businesses fear whether the over-enthu could kill free enterprise.
Hot in Alaska
IN THE cold environs of Alaska, the hot topic now is about the gas pipeline they are planning there. It is estimated to cost $20 billion, the largest energy project in US history, and aimed at bringing resources from the North Slope. Many, however, are opposed to the scheme, for different reasons. For industry players, any guaranteeing of minimum price for Alaska gas would amount to picking `winners and losers through selective regional subsidies' a taboo for an industry traditionally guided by market forces.
The eco-conscious argue that drilling should not be allowed in the Arctic National Wildlife Refuge. According to them, taxpayer subsidies are not to be wasted on fossil fuel; rather, it is wind and solar `that just needs an extra bump from the federal government'.
THE New York State Comptroller, Mr Carl McCall, who is the Democrats' candidate for governor, has unveiled his new tax plans.
One such is a targeted tax credit of $750 per employee granted to any company that hires someone for a new job at a salary greater than 125 per cent of the region's average wage.
However, to qualify for the credit, a person must be employed by that company for 24 consecutive months.
Mr Carl, who is "ready to get New York moving again", is hopeful that the programme would create 40,000 jobs state-wide, though it would cost the state $30 million over four years.
Another of Mr Carl's ideas is to prevent college graduates from leaving the state. He cites a report that says New York State lost 24 per cent of people aged 20-34 during the 1990s, that is, four times the national average.
So, he wants to create 150,000 new jobs over three years by offering another tax credit of $1,500 per employee to businesses that hire graduates of New York universities or colleges for new jobs.
A different type of reservation.
"Whenever I fill up the returns in a hurry, I make mistakes."
"Okay, do it at your own pace."
"But whenever I want to save tax, I tend to hurry."
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line