Monthly Archives November 2012

Pakistan Pushed to Change Taxes

November 29, 2012 Taxation in Pakistan

International Monetary FundISLAMABAD – In order to meets it own financial targets next year, Pakistan needs to broaden tax base and make tangible steps to fight the occurrence of tax evasion.

On November 29th the International Monetary Fund (IMF)released a Public Information Notice (PIN) with a summary of the results of the recent evaluations of the economy and tax system of Pakistan, saying that it is critical for Pakistan to take active measures to reduce its budgetary shortfalls in order to provide the resources and stability needed to encourage sustainable economic growth and to reduce poverty levels in the country.

The IMF explained that a key step that should be taken by Pakistan is to broaden the country’s tax base by expanding the scope of primary taxes such as consumption and income taxes.

The government wa...

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Tax Changes Needed in Europe

November 29, 2012 Taxation in EU

Tax in Europe

BRUSSELS – EU countries need to act now to broaden their tax bases and to reduce the unsustainable and damaging biases in their tax systems.

On November 28th the European Commission released its Annual Growth Survey for  2013, providing EU member countries with policy guidance aimed at boosting economic growth in Europe and at encouraging the development of more efficient and fairer tax systems.

In the report the Commission issued five objectives for tax policy changes in Europe, suggesting that all EU countries should fight to improve tax compliance, to shift tax obligations from labour to consumption, to impose more green taxes, to broaden tax bases, and to remove tax bias which encourages taxpayers to take on more debt.

The Commission explained its suggestions, saying that excessive t...

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Portugal Approves New Austerity Hikes

November 28, 2012 Taxation in Portugal

Vitor GasparLISBON – Portugal hopes to see its revenues rise by 30 percent next year, which could enough to secure further bailout payments and to allow the country to participate on international credit markets.

On November 27th the parliament of Portugal voted on the national budget plan for 2013, approving an array of new taxes, tax increases, and spending cuts aimed at increasing the government’s revenues by EUR 5.3 billion.

As part of the new tax package, from 2013 all individual taxpayers will be required to pay a new social solidarity tax of 2.5 percent on their incomes.

At the same time, the threshold for the top marginal tax rate will be reduced from EUR 153 000 per year to EUR 80 000 per year, and the top tax rate will be increased from 46.5 percent to 48 percent.

Middle income earners will...

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Tax Hike to Devastate US Economy

November 26, 2012 Taxation in USA

White HouseWASHINGTON D.C. – Allowing tax cuts on personal incomes to expire in the USA would have wide reaching detrimental effects on the national economy and would hamper the country’s economic growth.

On November 26th the US White House released a new report on the potential economic effects of tax increases on the national economy, claiming that US taxpayers “…can’t afford the threat of tax increase on middle-class families.”

According to the report, the USA needs to ensure that the tax cuts which are currently offered to middle income taxpayers are extended by the end of the year, as allowing them to expire this year would effectively raise the tax obligations for approximately 98 percent of American taxpayers, and would lead to a USD 200 billion reduction in consumer spending and a 1...

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UK Lagging on Tax Avoidance Investigations

November 26, 2012 Taxation in UK

Tax Bill

LONDON – The UK is not doing enough to address the issue of national taxpayers using overly aggressive tax avoidance schemes.

Last week the UK National Audit Office (NAO) released a new report  on occurrence tax avoidance in the country, showing that the HM Revenue and Customs (HMRC) has not yet implemented effective programs and systems to address overly aggressive tax avoidance schemes utilized by taxpayers.

According to the NAO, the HMRC currently has a backlog of 41 000 cases of aggressive tax avoidance, which could be proven to be inconsistent with tax law if challenged in a court.

However, despite the backlog the HMRC does not currently have any effective procedures in place for dealing with the outstanding cases, as “…while HMRC has a good success rate when it litigates, its inves...

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