Personal Finance

European leaders to fight against tax evaders

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On May 22, 2013, European leaders have determined to fight against tax cheaters and have pledged to share bank account data across the European Union and also accelerate the initiatives to tackle abuse by companies.

The leaders are facing a rising anger from hard-pressed tax payers about the loss of revenue and also a wave of publicity about how the big companies are saving billions by misusing tax loopholes. The leaders of EU have agreed to the automatic exchange of information beginning from January 1, 2015.

As he arrived in Brussels, Werner Faymann, Austrian Chancellor told the reporters, “It’s a bad day for tax cheats”. Fayman also confirmed that he would support the legislation. Recently, Austria, along with Luxemburg, had delayed the progress on ending bank secrecy. Every year, state members of EU lose about one trillion euros to tax fraud and aggressive tax avoidance, which is the equivalent of total spending on health care across the 27 nations and almost double the collective annual budget deficit.

According to the EU officials, economic crisis broke a logjam that has held up efforts at taxation reform for several years. The recent measures will mainly target the wealthy individuals.

Economy

International tax action demanded by Republic of Ireland

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A politician from the Republic of Ireland says that the international community must work together in order to stop large multinational firms that use cross-border tax loopholes. Richard Bruton, Enterprise minister, said that they play the tax codes one against the other.

Bruton added, “That is tax planning and I think we do need international cooperation through the OECD to deal with the aggressive nature of that.” The recent development comes as the EU leaders meet in Brussels to discuss the problem of tax avoidance. Meanwhile, UK Prime Minister David Cameron and others will be trying to crack down on those who do not pay their fair share of tax.

The PM will urge EU leaders to support global action against tax evasion and aggressive tax avoidance, which causes huge losses to nations. Chief Secretary to the Treasury, Danny Alexander, in an interview said that handling this issue was the main priority for the UK’s presidency of the G8.

Taoiseach Enda Kenny is likely to face a tough time amid accusations from overseas and within Ireland of a loose tax regime. The need for this meeting has come up as Apple is under fire over the tax use of Irish subsidiaries.

Economy

Discretionary spending not increased despite low gas prices

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Recent survey report has revealed that the gas prices in the US have slightly gone down in 2013, but this is not leading to a large consumer spending. It was noticed that about 80% of the 1000 people who were surveyed have not increased their discretionary spending in response to the falling gas prices this year.

At the beginning of 2013, it was noticed that the price of gas rose for 34 straight days and then a fall was seen during the months of March and April 2013. However, since then the prices have risen again slightly. That being said, gas is still much cheaper compared to that of 2012.

Media reports claim that a gallon of unleaded gasoline cost $3.65, which is 6 cents lower than the same time in 2012. On the other hand, economists claim that the lower prices are a good sign and many have also said that cheaper gas could even lessen the blow from the higher payroll taxes that went into effect at the beginning of the year.

Studies also mentioned that most Americans have cut on their discretionary expenses due to the higher prices of gas. Greg McBride, a senior financial analyst, said that the budgets are still tight and the households cannot lean against the crutch of credit to support their lifestyles.

Markets

LPG companies to stop supplying households with multiple-connections

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The PSU Oil Marketing Companies have been directed not to supply households with multiple-connections with LPG, for which no Know Your Customer (KYC) details have been submitted. This will come into effect on June 1, 2013. Transactions, including the delivery of non-subsidised cylinders will not be allowed once such connections have been blocked.

Customer data has been shared between IOC, HPC and BPC, while multiple LPG connection holders have been identified and intimated. List of such customers has been displayed at the respective LPG distributors, as well as published on the OMC websites including ebharatgas.com, indane.co.in and hpgas.com.

Only these customers will have to submit their KYC details with identity proof and proof of address immediately to the nearest LPG distributors, so that they can receive uninterrupted quota of subsidised cylinders. Other customers whose names do not appear on the list need not to submit their KYC details as they do not have to do so as of now.

The PSU Oil Marketing Companies will have to advise all multiple-connection holders to submit their KYC details. Customers are also advised to surrender their LPG connections immediately to their LPG distributors in order to avoid blocking of future supplies.

Business

China to help Indian companies with marketing

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On May 16, 2013, industry body Assocham said that China is interested in helping the Indian exporters market their products in that country. The widening trade deficit with China has been a major issue of concern for India. This issue was raised for discussion during a meeting between the Chinese Vice Ministerof  Commerce, Chen Jian and DS Rawat, Secretary General.

The statement from the chamber said, “China is keen to help Indian exporters to market their products in its country”. Even the Chinese Vice Minister of Commerce agreed to facilitate Assocham SME exhibitions in various provinces. China, in order to provide a mechanism for the same, will help the chamber to identify a nodal officer in China Council for the Promotion of International Trade.

India has asked China to open up its markets in areas like IT and pharmaceuticals, where the South Asian giant has an edge. The Indian exports to China include petroleum products, machinery, transport equipment, pharmaceuticals, precious metals and other products.

The Assocham said that China has emerged as the largest supplier of merchandise goods to India, which can at times hurt the interests of Indian manufacturers. Therefore, Indian manufacturers must also get a greater access to the neighbouring market.