On September 3rd the latest tax revenues figures from Irish Tax and Customs were released, showing that tax receipts for the first eight months of the year reached EUR 18.9 billion, EUR 1.9 billion lower than the same period in 2009, but only 0.7 percent lower the Government’s preset target. Brian Lenihan, Minister for Finance, commented approvingly on the results, saying that Ireland’s financial performance was on target with expectations. He added that in recent weeks local media has been underplaying the economy’s performance, calling it inadequate, but the latest results show that despite the seeming setback the country is not in “financial jeopardy”.

Corporate tax collections were shown to have the largest year-on-year drop during the initial eight months of 2010, falling by 24.1 percent to EUR 1.84 billion, although they were 4.3 percent above the Government’s expectations. Personal income tax was reported to have reached EUR 6.64 billion during the eight months, a fall of 8.2 percent from the same period in 2009, and 3.9 percent below projections. Value Added Tax (VAT) receipts were the largest contributor to the tax take, at EUR 6.74 billion. Despite dropping by 6.4 percent, when compared to the first eight months of 2009, VAT collections were 0.7 percent above previous estimates. Collections of stamp duties were shown to have the most significant fall during the period, at 9.2 percent, while Capital Gains Tax revenues were reported to have the highest increase, at 12.5 percent.

Interpretation of the tax revenue figures have already sparked heated debate among Irish political figures. Joan Burton, Labour Party Finance Spokesperson, has already claimed that Brian Lenihan is “delusional” if he believes that there is any sign of recovery, she added that if the Minister saw any indication of economic improvement, he was “dangerously in denial”. However, Brian Lenihan has already said that with three of the four most significant tax categories showing better than expected performance, it is hard to say that the growth is not apparent.

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After a brief reprieve, numerous countries are once again raising the call for an international currency transaction tax (often referred to as a Tobin Tax) to be instated worldwide. On September 1st Bernard Kouchner, Foreign Minister of France, announced that a group of sixty nations, most notably France, Britain and Japan, will propose the tax at the United Nations Millennium Objectives summit on September 21st.

The potential new tax revenues are intended to be used as funding for worldwide development and aid projects. According to Bernard Kouchner, a small levy on international financial transactions involving British sterling, Euros, Dollars and Yen would be a simplest and most effective tax option, as it would only need support from a limited number of central banks. It is estimated that the proposed tax will raise up to EUR 40 billion annually. Commenting on the potential revenues Bernard Kouchner said, “It’s not a lot, but enough to get things going.” It is estimated that the global aid gap has reached nearly USD 340 billion per year.

Recent efforts by nations to instate any form of international transaction taxation have been met with little success, leading some analysts to question the likelihood of acceptance for the new attempt. Acknowledging the potential lack of support, Soraya Rodriguez, Spain’s Secretary of State for International Co-operation said “We know there is reluctance and that’s why we have chosen the simplest option.”

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There will not be any significant reduction to most UK taxpayers’ liabilities at least until the next general election in 2015, according to a statement made on August 29th by Danny Alexander, Chief Secretary to the Treasury. Explaining the decision, he said, “The tax burden is necessary to get the finances in order. It will have to stay at that level for quite some time.” The Minister added that the revenue opportunities provided by maintaining current tax rates will be used to implement the Liberal Democratic Party’s plan to reduce the national budget deficit from the current level of 11 percent to nothing, within five years.

Danny Alexander conceded that there might be rebalances in tax rates within the foreseeable future but cumulative tax liabilities would remain the same, especially for middle-income earners. He admitted that the move would not prove popular with most taxpayers, but indicated that lower-income families might receive marginal tax relief, if economic conditions allowed. He added further, “In due course [the Treasury will be] looking at other ways to rebalance, looking at green taxes.” Peter Black, Liberal

The Government has already committed to cutting its public spending by up to 40 percent over the next five years, in order to reduce the national deficit figure. When asked about the feasibility of tax cuts at the end of the spending decrease program, Danny Alexander said, “You are asking me to take decisions for five years down the line now and I am not going to do that.”

Opposition political parties have already replied to the announcement with disapproval. Philip Davies, Conservative Party MP for Shipley, West Yorks, said: “We all understand that we have to get the deficit down. However, you start economic growth by having lower levels of taxation.”

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Overall state tax revenues for the April – June quarter of 2010 are 2.2 percent higher than in the same period of the 2009 year (or, 1.4 percent when adjusted for inflation), according to the Rockefeller Institute’s latest State Revenue Report, released August 30th. However, based on preliminary state tax data, the collections were still 17.2 percent lower than in the same time-frame of 2008.

The national increase for the period consisted of a 1.6 percent rise in collections of Personal Income Taxes (PIT), a 5.9 percent improvement in Sales Taxes figures, and an 18.8 percent drop in Corporate Income Tax (CIT) collection. Although, the growth in personal income tax revenues can be attributed largely to legislative tax increases in the state of California, without which the national level would be reduced to a 1.1 percent decline.

Based on preliminary state provided tax data, overall collections in Alaska were the highest growing in the country, with a level of 106.3 percent. In dollar terms, the state of Florida showed the most improvement with an approximate USD 766 million collections rise, primarily due to 14.5 percent growth in the CITs. Wyoming reported the greatest overall decrease, at 28.2 percent, followed by Louisiana, with a level of 22.1 percent. Of the 47 states with available data, 17 declared overall revenue declines.

While the results are relatively positive for the country, there were too many state-level declines to rule out economic uncertainty for the remainder of 2010. Persistently low CIT collection levels, and variability in other taxes imply that final collection figures for the 2010 year could still come out negative.

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In July 2010 the Latvian Government amended its immigration policies to make it easier for non-European Union investors to obtain legal residency within the country. Under the new rules, non-EU residents can be granted a five-year residency permit if they meet any of the pre-set conditions. Currently the options include investing at least LVL 25 000 (approx. EUR 35 300) in a local business, purchasing real estate exceeding LVL 100 000 (approx. EUR 141 225), or depositing at least EUR 300 000 in a national savings account. The residency conditions are considered to be perfectly targeted toward addressing the country’s current economic woes. The potential of receiving large deposits is anticipated to loosen credit conditions and downplay national banks’ current propensity against lending for local developments and businesses. The property investment clause is also predicted to aid Latvia’s sliding real estate sector. Additionally, it is expected that the new residents will provide highly skilled individuals for the national workforce, potentially counteracting the recently increased levels of emigration.

According to the International Monetary Fund (IMF), in 2009 Latvia suffered one of the most severe recessions in the world for the current year, with a GDP decline of nearly 18 percent, a tax revenue drop of 26 percent and unemployment levels reaching above 20 percent. However, in February 2010 the IMF predicted that the initial stages of a recovery would be seen by the end of 2010. On August 5th the Latvian Finance Ministry released a statement claiming that the post-recession economic declines are already slowing faster than expected. The national GDP level is now predicted to fall by only 3.5 percent in 2010, compared to earlier estimates of 4 percent. The 2011 growth estimate has already been raised to 3.3 percent, and 4 percent in 2012.

Recently, the Latvian Government made statements which have led economists to believe that attracting wealthy overseas investors with residency opportunities will play an important role in the economic recovery. On August 26th Aivis Ronis, Latvia’s Foreign Minister, stated that the country’s economic wellbeing and global economic competitiveness will be the primary concern in its international political relationships, leading analysts predict that greater emphasis will be now be placed on actively utilizing foreign investors to spurn an unexpected recovery.

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