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Credit where it is due department

Wednesday, August 20, 2008
Bean counters, 'Professional services organisation' KPMG has polled CFOs and the like on value added indirect taxes, and our lovely VAT system is reckoned the most VAT friendly of the systems in the major economies. Italy comes last and the US eleventh.

I will give the Dour One no credit for this, as doubtless he is intent on doing a similar number on VAT to that inflicted on the rest of the tax system, and any readers who suffer VAT returns can be excused for being in a state of shock.

Give KPMG's fun and games with tax shelters a few years back, I admire its chutzpah for drawing attention to tax issues, frankly.

No mention of KPMG would be complete without drawing attention to its hilarious corporate anthem, available as an MP3 for the strong of stomach / those who have been living under a rock here.

For those lacking PC speakers etc, this is the chorus:

KPMG - We're as strong as can be,
A team of power and energy,
We go for the gold, together we hold
Onto our vision of global strategy!

Further lyrics here.

Go on, click on the MP3, you know you want to.

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Where not to park

Saturday, August 16, 2008
Care of London Councils, which provided the data, and MS Paint, a map of parking fine hot spots in London. Note "6,176,752 penalties were issued in London in 2007/08 for illegal parking, driving in bus lanes [etc etc]".

Red (Westminster and Camden) managed to levy 824,687 and 529,874 parking fines respectively in the year to March

The next tier (yellow) between 150,001 and 300,000 fines each

Tier three (green) 100,001 to 150,000.

Tier four (pale blue) 50,001 to 100,000.

Tier five (dark blue) - City, Sutton and Havering, a derisory 0 to 50,000. Lest folk make haste to park in Sutton, Suttonians live under a reign of terror clamper-wise - it leads London boroughs for that particular form of extortion.

I do not have a car, so this is not really my problem, but it has long been clear that parking fines and so forth have precious little to do with keeping traffic flowing and an awful lot to do with tax farming. My brief rant on the topic is here.

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The 'Common Market'

Wednesday, July 16, 2008
Remember when it used to be called that, and we were led to believe it was little more than a free trade agreement?

I would be quite happy with that, but that is no longer on the menu. It does not even stand for inter European free trade any more:

"The European Commission today presented a Report and a proposal for a Directive to amend the current EU excise duty legislation on tobacco. The draft Directive foresees a gradual increase in the EU minimum taxation levels on cigarettes and fine cut tobacco up to 2014....László Kovács, Commissioner for Taxation and Customs Union said: “Today's proposal supports the EU policy to reduce tobacco consumption and narrow the differences in price levels of tobacco products within the EU. It will help reduce illicit trade and cross-border shopping, which undermine the revenue and the health objectives of Member States which impose high taxes to deter smoking. It will give more flexibility to Member States on setting minimum tax levels and will modernise the current rules so as to ensure a level playing field for producers and retailers".

Ever been had?

(Declaration of interest - I am a non-smoker who has lapsed but intends to stop dead tomorrow).

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Trouble for the Revenue?

Monday, June 23, 2008
Good news - for once - from the EU.

This is what EU Consumer Commissioner Meglena Kuneva had to say the other day, while in these parts:

"It is particularly important for consumers to challenge the acceptability of business models based on geographical discrimination. In the world we live in, we are not obliged to shop in the supermarkets and stores of our postal code. We are not constrained to buy in our municipalities. We should also not be forced to shop within our national borders. Yet we cannot buy computers, train tickets or play-stations freely across the EU. We are forced to buy domestic. Let me be clear, there is no place in Europe's Single Market for artificial geographical restrictions which hold consumers back within national borders. I am in the process of carrying out a study on e-commerce, which I hope will start to launch the debate."

That, made law, would rather put the kibosh on our penal duty rates on tobacco and alcohol....

(NB - One does need the EU in order for cross border trade to flourish....)


Meanwhile, in another release quoting the redoubtable, and not uneasy on the eye, Ms Kuneva, she is shocked, shocked, that fewer consumers engage in cross-border e-commerce than domestic e-commerce. Erm, penal international postage, exchange rates (in some cases) and language problems?

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Toynbee fact checker....

Tuesday, November 27, 2007
"Instead [Brown] boasted of Labour's deep cuts in corporation tax, which now at 28% is among the lowest in the west". Source

OK, let's take The West as being a synonym for the OECD. Fair?

"...at the turn of the millennium the British rate of 30% was 3.6 percentage points below the OECD average. Yet by 2005 it was 1.4 points higher. In 2000 there were only seven OECD members with a corporate tax rate lower than 30%; there are now 14". (This is from The Business in January 2007, quoted on the personal site of the author)

"Comparing Britain’s tax policy with that of the most forward-thinking European nations has become almost embarrassing. The Irish (with their 12.5% corporation tax) and the Eastern Europeans – in the Czech Republic, Hungary and Slovakia corporation tax is respectively 24%, 16%, and 19% – remain ahead of the pack. The rest of Europe is starting to follow their lead, as tax competition works its magic and forces even social-democratic governments to adapt to reality; some of the developments on the continent have been truly remarkable, albeit barely noticed by the British chattering classes. The Austrians cut corporation tax from 34% to 25% in 2005. A week ago, corporation tax in Holland was cut to 25.5%. Denmark has reduced its tax rate from 34% to 28%. In Finland it is now only 26%, compared to 29% in 2004. Between 1999 and 2004, the Portuguese reduced their rate from 37.4% to 27.5%. Corporation tax is also lower in Greece and Luxembourg than in Britain. Even in those European countries where corporation tax remains higher than in Britain, the direction is clearly down. In Belgium company tax has fallen from 40.2% to 34%; the Germans slashed theirs from 52% to 38.9% in 2001 and could introduce additional reductions next year. Last year, the French cut their own corporation rate from 41.7% to 34.4%; even more depressingly from Britain’s perspective, President Chirac has just pledged that France will reduce corporation tax to 20% in five years with the long-term goal of getting it down to 10%".

"....among the lowest in the west". Yeah, right.


"To quote Stefan Bach of the German Institute of Economic Development, “Even if a nexus between tax cuts and economic growth is not clear in theory and difficult to prove empirically, the international experience shows: countries that have lowered their corporate income tax had a positive economic development.” KPMG corporate tax survey 2006

Which survey also shows an average corporate tax rate, across 88 countries, of 27.1% as of 1/1/2006.

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What the Danes want

Tuesday, October 30, 2007
An end to the higher rate of income tax, by the look of things, but also snow for Christmas and better Christmas presents.

I have discovered this from the rather useful 'Votes for Sale' site, which shows candidates what they should promise if they want folk to vote for them: "Tax cuts, welfare reform, two cars in every garage or more snow on Christmas - sell your vote to the candidate who keeps their promise on the issue most important to you. Creators of the website ValgTilSalg.dk (VoteForSale) have given voters the opportunity to choose which election issue they think should take centre stage. ‘We thought, if politics is really about currying voters’ favour with huge campaign promises, then why not let the individual citizen decide for themselves which promise his or her vote can be bought with,’ said Torben Andersen of ValgTilSalg.dk". Source

It does not look as though any Danish pols are promising snow for Christmas as yet, but it looks like such a 'policy' would be popular. However, one should be wary of promises that one cannot keep: "A proper Danish Christmas should preferably be white, but unfortunately that does not happen often. Not until 90% of the country is covered with at least half a centimetre of snow does Denmark’s Meteorological Institute say that we have a national white Christmas, and we have actually only experienced that seven times since 1900. That was in 1915, 1923, 1938, 1956, 1969, 1981, and 1995".Source . Maybe 2009 then...

My Danish is not all it could be, so I am reliant on online translation for the detail as to current voting on the site, but it is notable that the bulk of participants thus far are self-defined as Socialdemokratiet, and working that one out is none too challenging. So excluding the silliness involving weather etc, it is quite heartening that voters choosing a party affiliated to the Socialist International are keen on tax cuts and the like. And yes, I know this is a self- selecting poll and of absolutely no statistical validity.

So, what would readers like to be promised?

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What is it with Liverpool?

Tuesday, October 09, 2007
This is not going to be a bash the Scousers post, but rather one that points the finger at that city's Lib Dem council.

Joan 'I used to run CND you know' Ruddock has been chewing over the fly-tipping league table, and "The results, covering 354 English authorities, show an increase in incidents over the past year, however, nearly half of all cases reported came from Liverpool City Council".

First things first - why do people fly tip? Because there is no collection, or the marginal cost of taking rubbish to a dump is too high. Typical scenarios might involve someone turning up at a municipal tip without a resident's permit and facing getting caned on dumping fees, or a council that goes to fortnightly collections but without increasing bin size. As a footnote, the 'civilians' I spoke to in Blackpool - hoteliers, other guests - got very, very heated about fortnightly collections.

So, the most cost effective way to reduce fly tipping has to be to address issues via reducing marginal costs, as fly tipped rubbish has to be collected and processed in the usual way, and I point blank refuse to believe that the 2.6 million reported incidents of fly tipping in England were the only ones that came to pass.

Returning to Liverpool, "Half of all fly-tips recorded involved single black bags and it is estimated that the majority of these occurred in back alleys and involved waste placed out for collection incorrectly, primarily in Liverpool". Surely the Sanitary Inspectors of Merseyside would be better off explaining refuse collection policies in the city rather than trawling the streets with a spiral-bound notepad / PDA noting down infringements of Bin Law. The full DEFRA reports by region makes it plain that Liverpool specialises in writing warning letters to bin users / non users, at who knows what cost. Adjusting my ever present cynical hat, I would imagine that the council is just itching to spot repeat offenders to it can engage in a little light tax farming via fixed penalty fines for putting rubbish out on the wrong day.

After all, it is grotesquely unreasonable for someone without a car and about to go on holiday for a fortnight to put rubbish out the night before, rather than return to a house crawling with maggots, isn't it?

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How would you describe taxes? As beautiful?

A necessary evil, maybe? A source of intense irritation, perhaps?

Not, however, Tommaso Padoa-Schioppa, the Italian Economy Minister, and Brown's successor at the IMF: he thinks they are 'beautiful'. Yes, really.

""We should have the courage to say that taxes are a beautiful thing, a very civilised way for everyone to contribute in essential areas like education, safety, healthcare and the environment," he said. "People can be unhappy about the quality of the services they receive but not simply opposed to the existence of taxes," he added".

That's me guilty of first degree thought crime then.


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Memo to Brown from the OECD

Thursday, September 27, 2007
Available in full here.

"The budget deficit remains large, and slower growth in government expenditure will be required over the coming years, as well as more effort to ensure good value for money in public spending"

"Incentives to join the workforce and to progress in work should be improved for certain groups such as second-income earners, lone parents, and incapacity beneficiaries. This may require reducing marginal effective tax rates and providing greater access to child-care support. A slower rise in the minimum wage may also improve the employment prospects of the low-skilled".

"Tax competitiveness should be improved by continuing to broaden the corporate tax base while cutting the rate. The corporate tax system should be simplified and there may be room to shift taxation to less mobile sources".

More later, possibly.

(Ahem, headline typo fixed)

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No turnips, the Swedes.

Tuesday, September 18, 2007
(Headline courtesy of Dizzy)

Consider our fortunate friends on the other side of the North Sea:

"The government has pledged to introduce income tax cuts worth 10.8 billion kronor (£800 million) at the beginning of next year. Writing in Dagens Nyheter, the four party leaders promised that this second wave of income tax cuts, combined with the first, would result in a total increase of 1,000 kronor (£75) per month in take home pay for all those in gainful employment". Source

Could they be persuaded to launch another Viking invasion, please?

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Joined up government....

Wednesday, September 12, 2007
I have always thought that Safed is a town in Israel also known as Safad or Tsfat, but it also happens to be the name of a project Ruth Kelly is rather proud of, this being "The Safe and Fuel Efficient Drivers (SAFED) scheme". More here.

Anyway, the DoT has spent some £2.2m training the enormous number of 7,800 van drivers in "driving techniques that save fuel, thereby cutting costs and CO2 emissions". From what I can see, the information it takes a day's course to convey - "avoiding over-revving and unnecessary gear changes, keeping correct braking distances" etc is covered by the driving test, but never mind.

Safed's site, which does not seem to understand the correct use of 'fewer', refers to it as being "a complementary driver development course, consisting of assessment and training". However, the press release I am working from footnotes "participants are expected to contribute to the cost of their training on a sliding scale", and it would seem that a pricing structure will appear one of these days.

Anyway, it reckons that the drivers who have taken the course achieve "an average 16% improvement in miles per gallon, giving a potential annual fuel saving of £3.3million", at a cost of £2.2m. Not a brilliant return on the investment, but we really ought to add in the 60% plus of the cost of a litre of petrol that Dismal Gordon and similarly Dismal Alistair will now be foregoing - let's call it the thick end of £2m. So it has cost the taxpayer £4.2m.

I'd pray that Gordon does not read your press releases if I were you Ruthie.

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Romano Prodi, theologian....

Thursday, August 02, 2007
As if being a former EU head commissar and leading a coalition including the extreme left is not enough, Prodi has decided to lecture Rome on matters of faith and the like:

"Prodi sparked the row on Tuesday when he said in an interview published by Catholic weekly Famiglia Cristiana: "When I go to Mass, why do I almost never hear the priest talk about tax evasion, which is an important moral issue?" The Catholic premier said a third of Italians were major tax dodgers and that "in order to change mentality, everyone has to do their bit, the schools and the Church included". Source

Well, well, well. The Church has been around an awful lot longer than the Italian Republic, and it ill behoves Prodi to tell it what to put in its homilies.

I cannot lay hands on the details, but I read some years back that if the Italian state collected all of the taxes it levies, they would amount to something like 110% of GDP, and that an espresso bought in a cafe suffers about a dozen different taxes.

Meanwhile, my archepiscopal hero of the day is Bruno Forte, the Archbishop of Chieti, "[who] said part of the blame lay with the government because it failed to show citizens that their money was being well spent".

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The EU does something useful.

Monday, May 14, 2007
For once. Here is the taxes in Europe database, an online tool that permits the user to perform searches on the basic tax structure of EU countries. I have already discovered that Romania taxes gambling wins at 16%, which seems a little mean. Anyway, worth playing around with, and I am dreaming of Estonia's apparent 11.9% income tax rate.

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Three cheers, maybe four, for the Irish Republic's Electorate

Saturday, May 12, 2007
A most heartening poll in The Irish Times:

"A substantial majority of voters are not prepared to pay more taxes to fund public services, but they believe the Government already has enough money to fund those services... Asked if they would be prepared to pay more taxes to fund public services, 72 per cent said no, while 23 per cent said yes".


Is it because the Irish Republic's electorate is clearer sighted than our own, or that they are more prepared to tell pollsters what they think, in contrast to this neck of the woods where pollees seem inclined to give the 'right' (or rather left...) answer to the man or woman with the clipboard and another answer in the voting booth?


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The country where the promise of a new tax is cheered

Wednesday, May 02, 2007
In this case, Croatia, with the tax in question being capital gains tax.

Stipe Mesic, president of Croatia is behind this idea, and a May Day rally in Zagreb cheered the idea to the echo. As ever, the tax is not popular because of concern for sound money or somesuch, but rather because of its facilitating of a nice bit of class war: "Mesic said that some of the capital stolen in the process of privatisation could be returned by imposing taxes on capital gain and large inheritances".

Pretty odd for a former Christian Democrat.

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The Italian equivalent of the Inland Revenue rules on taxes for lap dancers

Friday, April 27, 2007
And of two possible tax rates, the Agenzia alle Entrate has chosen the higher, because "shows are in the 10% tax bracket while audience participation bumps up the tax to 16%", and prompted this po faced explanation:

"The active participation of the client in the dancer's act and his physical involvement in it are not caused by mere chance but are a strong characteristic of the very nature of the lap dance". More here

Do you suppose they based this on hearsay evidence, or the various government inspectors had to do some field research?

(And while I know that there are lap dancing cognoscenti among my regulars, let's keep this PG, please)

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Budget betting

Wednesday, March 21, 2007
As a public service, I have investigated available markets for budget betting, and here are some highlights, courtesy of Paddy Power:

What will he say first:

Economic Growth - 3-1
Commitment - 3-1
Infrastructure - 4-1
Prosperous / Prosperity - 4-1
Stability - 6-1
Inflation - 8-1
Prudent - 12-1

No sips of water is the hot favourite at 8-11, the speech being under 57 minutes is available at 8-13 and 11-15 mentions of 'environment' at 2-1.

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