Malta Takes a Stand Against Financial Transaction Tax Proposal
Posted: 29/03/2012 Filed under: Malta News | Tags: EU, Financial, Tax Leave a comment »
Last week, a meeting of the Economic and Financial Affairs Council was held and a Financial Transaction Tax was proposed. Malta’s representative to the meeting, Finance, the Economy and Investment Minister Tonio Fenech announced that Malta was against this proposed tax. Fenech claims that this tax, as it was presented, could lead to problems with fair competition. He also stated that this tax would create unfair disadvantages to smaller members of the EU because net revenues would not be worth the economic distortion that could take place.
As of now, the Council is split on the ideal of the Financial Transaction Tax, so no vote nor tax has been implemented. Several members are considering going off on their own and coming up with another idea for the situation. The Council members who have presented the proposal have also agreed to review it, make changes and present it again at the next meeting.
On top of the Financial Transaction Tax, other economic issues were discussed at the meeting as well, including the ever unstable economies of Greece and Spain. The Council is cautiously optimistic about some of the proposals and changes that are happening in Greece and believe that these changes could also help the overall economic stability of the EU.
Though not a member of the euro zone, economic situations in Hungary were also discussed, as there could be several indirect effects to euro zone countries if Hungary is unable to repay their excessive debt. Changes to their deficit procedure as well as suspending some of their commitments are possible solutions to the problems in Hungary.
Malta was not scrutinised during the meeting as the economy is stable enough to pass the criteria laid out by the Council to merit a pass when it comes to looking at a countries economic situation.
Construction Losing its Impact on the Maltese Economy
Posted: 28/03/2012 Filed under: Living in Malta, Malta News | Tags: Construction, economy, Tax Leave a comment »
Back in 2008, one of the things that kept Malta from having the same fate as many other EU countries during the global recession was the construction industry. In 2008, construction contributed about €245 million to the Maltese economy, but has steadily declined ever since. In some areas, like Sliema, locals feel that the construction industry is really taking over and this was even an issue during the local elections, but overall, throughout the country, construction seems to be losing its footing which could mean the Maltese economy could take a hit.
When looking at numbers from 2011, the first nine months of the year showed growth and steadiness for construction, but from October, 2011 to the present, declines have happened each month. In fact, many economists described the economy of the construction sector as “dismal” in the last quarter of 2011. Unfortunately, the first quarter of 2012 is not looking good either. Luckily, the construction industry is only one of the sectors of the economy that has shown negative growth.
Other sectors, like real estate, are definitely helping to keep the country’s economy above water. The real estate sector alone contributed €341 million to the economy last year but builders and developers say this is only because there is an oversupply of homes for sale. Even with gains in most of the economic sectors of Malta, loses have been significant to the overall economic health of the country. In 2011, the economy shrunk by about 0.1% meaning that Malta is technically hanging on the edge of a recession.
The construction industry, which obviously suffered in 2011, is blaming the government for high taxes which is not making the buyers eager to purchase homes in Malta. Estimates are that the economy may further shrink if the government does not step in with a plan.
Maltese Developers Looking to Make Changes
Posted: 27/03/2012 Filed under: Living in Malta, Malta Taxation | Tags: Buidling, Development, Tax Leave a comment »
Michael Falzon is the President of the Malta Developers Association and he says members of the organisation are ready to make changes to the face of Malta by restoring the urban areas of Gozo and Malta to their former splendour. This idea came about because too many potential buyers stated that they have passed on homes and buildings because they were simply not attractive enough. Though it is true that restoring a home would be expensive, the Maltese government has announced a plan to offer rebates on the cost of some upgrades and restorations on homes in certain areas. This could significantly help this plan succeed, as more people would likely be interested in upgrading their homes.
The truth is, many builders and developers have found that there is a lot of unused land in Malta and they want to develop it. Many Maltese want the land to remain as is and they want the natural state of the land to be part of the landscape of Malta. In order to please both sides, the government has offered this arrangement which would make both homeowners and developers happy. They homeowners would get rebates up to 20% on any new upgrades or restorations of their homes and the builders and developers would have steady work.
Falzon agrees that this is a good idea and that the government will have the full support of the Malta Developers Association. However, he also said that the Association does not believe that this would significantly cut down on the number of abandoned buildings. In order to fill those buildings, on top of the upgrades, the Association says that the government should lower tax duties on the sale of the buildings and offer more rebates for home owners. As of this writing, the government has had no response and still plans to go ahead with the upgrade plan.
Malta Could Save €577 Million by Stopping Tax Evasion
Posted: 07/03/2012 Filed under: Business Setup In Malta, Living in Malta, Malta Taxation | Tags: business, EU, Tax Leave a comment »
New numbers are out that indicate Malta could save €577 million by simply toughening up on tax evasion. There are estimates that many million Euros are being missed by the government of Malta due to underground business operations that are not being taxed nor collected on. In fact, it is estimated that this is about 27.2% of the countries annual income. If the government was able to crack down on this type of practice, the financial health of Malta would surely improve.
Credible sources have announced these numbers to leading media outlets in the country and further state that the underground, untaxed business dealings that go on in Malta could be worth as much as €1.686 billion a year. This is about one quarter of the income of the country and at this point, Malta has no way of collecting any tax on it. Though Malta is not the only country in the EU with this issue, they are surely in the top five or six of the EU27. Even more startling, these unnamed sources go on to say that the taxes being lost by Malta due to this booming underground economy amounts to 255.2% of the 2009 public deficit of Malta. Across the EU as a whole, it is estimated that about €1 trillion is lost annually because of underground and untaxed businesses.
Independent groups throughout the EU as well as in Malta are urging both the Maltese government and the European Council to forcibly begin taking the money that is due to them from these underground businesses. These groups suggest that all countries in the EU addressing this at the same time would make the most sense as there would be no place for underground businesses to go if they wanted to continue this practice, short of leaving the EU, of course.
UK Tax Laws A Spaghetti Bowl
Posted: 17/08/2010 Filed under: UK Taxation | Tags: corporate tax, corporation tax, Tax, tax refunds, Taxation Leave a comment »The “spaghetti bowl” of UK tax law is to be simplified with a goal to boost the British economy.
The new government says that the tax system has become a hindrance to businesses under Labour, and that by simplifying it and making it more competitive for small firms it would stimulate economic growth.
George Osborne states “Today we turn the promises of opposition into the policies of government.”
Treasury minister David Gauke said “The tax system created by the previous government was overly complex and has made the tax affairs of millions of families and businesses across the UK extremely complicated.
“We need to reduce the complexities in our tax system and the coalition is committed to delivering that goal.”
The OTS’s remit includes UK taxes and duties controlled by HM Revenue and Customs, but it will not deal with tax credits or taxes administered by other bodies nor will it have any say in the setting of tax rates.
The chairperson of the new body will be Michael Jack, former Conservative MP and Treasury minister and the director shall be tax director at the Chartered Institute of Taxation, John Whiting. Neither shall be paid for their services.
This is truly excellent news for small businesses in UK, with the tax system easier to understand, people wont be as worried to start up in the market, causing the British economy to grow again. I know my clinets will welcome it and I am relived the government has finally seen the light.
If you need help understanding the laws on tax as they stand or how the changes will affect you please get in touch with us here at St Matthew’s eAccounting. We are happy to help.
UK Tax Laws Opaque And Complex.
Posted: 13/08/2010 Filed under: UK Taxation | Tags: corporate tax, corporation tax, Tax, uk companies Leave a comment »UK tax law is to be simplified. This is to cut the burden on business and attract foreign investment, George Osborne says.
The new body shall initially host a two year review – first looking at all 400 tax relief, exemptions and allowances within the system to see how they could be streamlined. The second review will be to find ways to simplify the tax system for small businesses, this includes trying to find a simplified alternative to the contentious IR35 code.
A Office for Tax Simplification is being set up to streamline the 11,000-page tax code.
Mr. Osborne says Britain had “one of the most complex and opaque tax codes in the world” and it needed to be simplified.
Announcing the new body at a press conference, Mr. Osborne said his “dream” was “that people might actually understand the tax laws which they were being asked to comply with”.
It is set to advise ministers where the tax system is too complex but it will not look at tax credits, which Mr. Osborne says he considers to be part of the benefits system.
Labour claim to have backed the simplicity movement but then announced ministers were bringing in yet more overly complex new taxes at the same time.
I believe this is very exciting for the future of small businesses, making the market a lot easier to break into.
Are We Our Own Worst Enemy? VAT Rises.
Posted: 12/07/2010 Filed under: UK Investment, UK Taxation, VAT, VAT Registration | Tags: business concerns, corporation tax, Tax, UK tax, VAT Leave a comment »It looks as though us Britons are tightening our purse strings again, as we fear another recession backlash. It is said we fear a ‘double dip’ in the economic climate after the recent VAT increase to 20pc.
Being more careful about what we purchase, four in ten have said they wardrobe raided in order to recycle their old garments as opposed to buying new, up to date fashion.
According to the survey conducted by GfK NOP, a third of consumers claimed they had stopped dining out in order to save the pennies and credit cards are being used less for those luxury items we indulge upon.
It isn’t just the consumer-facing companies that seem to be threatened either, people are now changing their lifestyle choices, 6pc surveyed are postponing getting married and an equal amount are putting off having children until the threat has passed.
Ironically, the fear that has been created surrounded the second recession is, in fact, what just may cause the ‘double dip’. Our inclination as a nation to save during these times of ‘economic uncertainy’ could have a devastating effect in the long run.
It is my opinion that consumers should not be so over-cautious when considering the coming of the second recession.
If you are worried about the double dip (AGAIN) and want to discuss any aspect of your business, Please contact us here at St Matthew’s eAccounting. We know business in the uK
Income taxation Abolished For Low Earners
Posted: 22/06/2010 Filed under: Moving to London, Non Dom, Small Business, UK Taxation | Tags: corporate tax, corporation tax, Tax, Taxation, UK tax, VAT Leave a comment »I thought I would outline some of the things we are expecting from Mr Osbourne’s budget tomorrow so we can evaluate how close our expectations are. Mainly it is about taxation and spending cuts but which taxation and where is the axe likely to fall?
The first thing that jumps out at me from the predictions is the idea that George will be abolishing income taxation for the UK’s lowest earners. I must admit that this has always made sense to me. It seems a convoluted way to do thing giving people money with one hand i.e. child support and other benefits and then taking it away with the other. By all means if people are struggling to get their heads above the poverty line then let them keep the money they work for.
To go along with his tax exemption for low earners the chancellor is also likely to announce a number of money-raising measures, including an increase in capital gains tax, a levy on bank profits, and rises in alcohol and cigarette duties. There is also likely to be a change in aviation tax.
It is interesting about the aviation tax but a rise in taxation on cigarettes and alcohol is to be expected, have we ever had a budget that did not include this move?
Anyway we have not got much longer to wait. Tomorrow will give us all the answers.
Capital Gains Tax Rise: Big Winner Or Huge Loser
Posted: 30/05/2010 Filed under: UK Taxation | Tags: business concerns, corporate tax, corporation tax, Tax, Taxation Leave a comment »Clearly there are two sides to every story and it would seem the same is true of every proposed strategy to re pay our national debt. I think the best way to tackle the two sides of the argument concerning a proposed huge rise in capital gains is to blog on one pro article from the week and one anti. Then you can make your own decision.
In the Scotsman on Sunday business commentator Alex Orr lampooned the governments plans to hike up capital gains to a massive level. He made no bones about his thoughts on the plan, calling it incompetent and claiming it will thoroughly stifle the economic recovery that the UK has struggled into.
His reasoning is that the tax will discourage investment and ultimately result in a widening of the deficient and not a narrowing. He goes on to argue that the UK should learn from the examples set by Australia and the USA where similar moves decreased quite drastically the incoming of revenue.
If Mr Orr is to be believes then the new coalition government could be starting out its term with the biggest policy blunder in recent history.
But you know what experts are like. Tomorrow I will call on the writings of another to show you why Mr Orr is dead wrong. Apparently.
Will VAT Rise Cause Job Losses?
Posted: 28/05/2010 Filed under: Uncategorized, VAT, VAT Registration | Tags: business, business concerns, Tax, Taxation, UK tax, VAT Leave a comment »As usual it depends on who you listen to as to whether or not you believe that a rise in vat in the UK will cause a fall in employment.
The British Retail Consortium has come out this week and claimed that the rise in Vat that is expected in the next budget will cause massive job losses from the retail sector. Their figures are dire and fairly scary. They say theat the predicted new VAT rate of 20 per cent would cost 163,000 workers their jobs and mean a consumer spending clamp down that would cost £3.6 billion over the next four years. That does sound grim.
As usual though ( and you cannot blame them) they are only seeing things from their point of view. They are urging the government to make cuts in the public sector instead of raising tax and they are doing so without a hint of irony. Despite the fact that public sector cuts would be sure to still result in large numbers of jobs being lost; just not in the area they are concerned about.
It seems that many experts think the BRC may be skewing a figures a little bit in order to make their case. I think that is natural. But I despite their scare tactics I think I am still leaning slightly towards the VAT rise being a good thing. But I am not yet completely convinced,
Interesting times ahead.
