Cryptocurrency Blamed for Profit Shifting in Australia

March 31, 2015 Taxation in Australia

CANBERRA – The tax system in Australia cannot adequately deal with modern cryptocurrencies, and the tax system needs to be updated to take such technologies into account.

In a discussion paper issued on March 30th the Treasury of Australia claimed that Bitcoin and other cryptocurrencies undermine the national tax system and contribute to profit shifting and erosion of the tax base.

In the paper it was specifically pointed out that “…new ways of transacting, including cryptocurrencies such as bitcoin, were not contemplated when the current tax system was designed”, and these ongoing developments may hinder a company’s ability to accurately and appropriately determine its tax obligations in a specific country, opening a significant pathway for profit shifting.

Despite pointing out ...

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Offshore Centers Told To Make Central Register

March 30, 2015 Taxation in British Virgin IslandsTaxation in Cayman IslandsTaxation in UK

LONDON – Offshore companies may soon have to reveal the identities of their ultimate beneficial owners, with the information to be recorded on a central register.

Late last week the UK government instructed the British Virgin Islands and the Cayman Islands to set out a timetable for the implementation of a central register of companies.
As part of the proposed central register, information about the ultimate beneficial owner of each company will be made available in the register.

The central register is intended to help combat international tax evasion, as it will become more difficult to use offshore shell companies to unfairly dodge taxes.

However, authorities in both the British Virgin Island and in the Cayman Islands have already objected to the proposed register, saying that it will ...

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Kenya Should Drop Tax Incentives

March 27, 2015 Taxation in Kenya

NAIROBI – International investors coming to kenya are not doing so because of tax incentives, and such tax breaks should be dropped.

In a speech delivered at a conference in Kwale on March 25th the Commissioner General of the Kenya Revenue Authority John Njiraini called for the government to retract the tax breaks provided to foreign investors.

Currently, foreign investors operating in the Export Processing Zones can enjoy a 10 year tax holiday, along with duty free imports, and a 100 percent capital investment deduction on certain activities.

The Commissioner General claimed that the majority of investors who come to the country are not convinced to do so due to the tax breaks but instead enjoy the country’s political stability, security, access to the local and regional market, the lo...

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Zambia Drops Cancels Hike to Mining Taxes

March 26, 2015 Taxation in Zambia

Mine in ZambiaLUSAKA – Mine operators in Zambia will soon have a temporary reprieve from a recent tax hike, as the government looks for more amicable solution to balance the need for tax revenues and the interest of the mining sector.

On March 25th the President of Zambia Edgar Lungu announced that the government will drop the recently implemented hikes to mineral royalty taxes, following months of negotiations and protest from mineral extractors operating in the country.

Late last year the government announced that mining companies would no longer be required to pay income taxes, however, the measure would be replaced with a hike in royalties, with the rate for open-cast mines rising from 6 percent to 20 percent, and the rate for underground mines rising from 6 percent to 8 percent.

However, the ris...

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Tanzania to Drop tax on Wood Carvings

March 25, 2015 Taxation in Tanzania

DODOMA – Tourists and craftsmen in Tanzania will soon feel some relief from taxation as the government eyes abolishing an exorbitant tax on locally produced wood carvings.

In a speech delivered in Arusha late last week the Minister for Natural Resources and Tourism of Tanzania Lazaro Nyalandu indicated that the controversial tax on wood carvings paid by tourists will soon be abolished.

As of February this year tourists departing the country with locally purchased wooden carvings valued at more than approximately USD 300 will be required to pay a tax of USD 70, while carvings valued less than USD 300 will entail a levy of USD 16.

According to the Minister, the tax greatly hinders the government’s efforts to boost tourism in the country, as “…curios and hand-made crafts businesses have a clo...

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