Saturday, October 4, 2014

STRENGTHENING TAX REVENUES TO FINANCE INCLUSIVE AND SUISTAINABLE ASIA PACIFIC GROWTH

Growth prospects in most Asia Pacific countries are projected to remain subdued requiring them to step up productive and countercyclical spending, both as a short term stimulus to the economy and to help remove long term structural constraints to sustaining economic dynamism according to Survey 2014. It advocates government expenditure targeting three key impediments to growth : (i) Socio-economic inequality (ii) infrastructure gaps in connectivity and energy and (iii) environmental degradation and climate change.

Given limited Government funds and declining international development assistance, Asia Pacific developing countries will have to increase fiscal space for productive spending by stepping up financial resource mobilization survey 2014 examines options for this, including higher borrowing and repriotizing public spending towards development. Borrowing carries risks such as high debt servicing costs, maturity mismatches and limited room for macroeconomic policy manoeuvre to revive growth. Nothing the political constraints to reducing government subsidies, which are sizeable in many countries in the region, Survey 2014 advocates strengthening tax revenues.

Overall tax collection in the region is relatively weak in 2011 central government tax revenues averaged 14.8% of GDP in Asia Pacific developing countries against 17.1% in Latin America and the caribean and 16.3% in sub Saharan Africa. This is far from 25-35% of GDP i.e. considered one of the perquisites for being able to provide in the financing and expenditure to become a developed country in Survey 2014.

The good news is that there is a significant gap between potential and actual tax revenues, announcing to more than 5% of GDP in some countries in the region. Survey 2014 estimates that harnessing the additional tax potential in 16 Asia-Pacific developing countries would increase total tax revenues by over 300 billion, boosting tax revenues by over 70% in some countries.

Survey 2014 also notes that although indirect taxes levied on goods services and trade are the main revenue source in more than ½ of Asia-Pacific  countries, these are not only regressive but also affect prices and thereby influence resource reallocation. Direct taxes are more equitable as they can be progressive with higher rates at higher levels of income, it says Survey 2014, therefore suggests strengthening direct taxes revenues by broadening the tax base rationalizing rates, tackling evasion, making tax administration efficient and carefully sequencing tax reforms. Instead of high tax rates and import tariffs, which lead to tax evasion, smuggling and reduced international competitiveness countries should aim for a large tax base with relatively low and consistent rates.

Survey 2014 also emphasizes the urgency of tackling tax fraud and calls for the establishment of special tax courts for this purpose. Doing so is especially important considering that the region for over 60% of the estimated upto 5.9 trillion in illicit financial outflows from the developing world between 2001 & 2010.


A key recommendation of Survey 2014 is the need for regional cooperation on tax issues, including harmonization of taxes, elimination of tax competition and combating cross border tax crimes. It purposes the creation of an Asia-Pacific tax forum under the aegis of ESCAP to monitor tax legislation and regulations across the region, help develop regional best practice and address issues such as avoidance of double taxation and tax competition to attract foreign investment.

REGIONAL COOPERATION CAN BOOST DOMESTIC TAX REVENUES FOR SUSTAINABLE DEVELOPMENT

REGIONAL COOPERATION CAN BOOST DOMESTIC TAX REVENUES FOR SUSTAINABLE DEVELOPMENT

While mainly a domestic policy issue tax revenue collection within a country can be affected by policies in other countries. A well known e.g. is the growing tax competition among the countries to attract foreign direct investment. This is leading to a race to the bottom as reduced tax rates concessions and incentives for foreign investors distort competition, placing local businesses at a disadvantage.

Survey 2014 expenses concern in view of the findings that tax concessions do not necessarily attract higher flows of foreign direct investment. On the other hand such policy is eroding tax revenues in the region, which lags in tax collection. Central Government revenues averaged only 14.8% of GDP in developing Asia-Pacific countries in 2011, compared to an average of 17.1% of GDP in Latin America and the caribean and 16.3% in sub Saharan Africa.

Accordingly Survey 2014 highlights the need for Asia-Pacific countries to work together to harmonize taxation. This can involve subregional groupings such as the South Asian Association for Regional Cooperation (SAARC) and the Association of Southeast asian nations. (ASEAN).

Harmonizing corporate tax rates is one of the survey 2014 proposals for regional cooperation on tax issues to strengthen domestic resource mobilization by Asia-Pacific developing countries. It outlines 5 other areas for regional cooperation on tax issues.

Combating transfer pricing : Regional cooperation is key to tackling transfer pricing by multinational companies which involves the pricing of transactions between their subsidiaries in different countries to divert more profit to a country with lower taxes. Some 20 Asia countries have already incorporated transfer pricing rules in tax laws. Thus, the income tax deptt of India ensures that most multinational corporations are audited for transfer pricing.

Combating tax havens and illicit transfers: Another cross border dimension of tax collection is manifested in lllicit financial flows. Developing countries worldwide lose an estimated 5.9 billion in clandestine international financial transfers. The Asia-pacific regions is the major source of such outflows, accounting for more than 60% of illicit financial transferes from the developing world.  This can be addressed by bilateral treaties to provide for regular and automatic exchanges of information related to civil and criminal issues. It would not require suspicion of a crime other than tax evasion and would override bank secrecy laws in tax havens.

Agreements on Double Taxation :  Another important area of regional cooperatioin is broadening double tax avoidance agreements (DTTAs) to give corporations greater confidence and to encourage investment. For e.g. India has comprehensive DTTAs with 88 countries and Pakistan with 63 countries. ESCAP can prepare a generic DTAA and encourage member countries to sign bilateral agreements.

Harmonizing import duties for transit trade :  Landlocked developing countries can lose sizeable revenue to smuggling if their import duties on transit trade are not harmonized with those in the country providing the transit.

Survey 2014 advocates the creation of an Asia-Pacific tax forum to monitor tax laws, promote sharing of best practices and provide training and capacity development. Such a forum, which could be hosted by ESCAP, would enable countries to strengthen revenue collection and provide urgently required resources for the investment in sustainable development.

Zee TV announces its biggest Diwali Extravaganza




Shah Rukh, Deepika, Farah, Abhishek, Boman, Sonu Sood and Vivaan Shah
come on board as ‘Agents of Happiness’
When 13 year old l’il Bheem taps his feet, snaps his fingers with a big grin on his face and moves like no one’s watching, he isn’t exactly the embodiment of perfection. He is, perhaps, more a comedy of errors, if anything. But one thing’s certain – He does put a smile on your face because he’s dancing straight from his heart. Ditto for Minal’s kitty party gang of middle-aged housewives from Karad, nurse Nora John who serves patients round-the-clock and dances behind closed doors because that’s the one thing that makes her happy and the senior citizen’s club of Mumbai who can put any youngster to shame with their spunk and energy. They have just a few things in common – a complete lack of inhibition, an ability to not take themselves too seriously, lose themselves in the moment and celebrate their own imperfections while spreading their inner joy as they dance seedha dil se …!

Zee TV, with its landmark franchise Dance India Dance, celebrated India’s passion for dance, making it nothing short of a religion across the country! Having scaled the pinnacle of brilliance in aesthetic, skillful dancing with DID, Zee TV now introduces India to yet another home-grown format … a genre of dancing that calls out to every Indian to brush aside considerations such as technique and training, just let their hair down and dance straight from the heart! Partnering with India’s biggest superstar Shah Rukh Khan’s Red Chillies Entertainment & ZEEL’s creative and production studio Essel Vision Pvt Ltd, Zee TV brings viewers the biggest entertainment extravaganza with the hottest celebrity panel ever – ‘Maruti Suzuki Alto K 10 Dil Se Naache Indiawaale Co-powered by Askmebazaar.com & L’Oreal Paris Fall Repair 3X’.

Dil Se Naachein Indiawaale will be India’s first ever multi-city dance tour in search of the happiest dancer! Conducted through a joyride on a special ‘Happy Dancing’ bus, the tour will reach Mumbai, Delhi, Ahmedabad and Indore in the coming days with a star-studded panel called the ‘Agents of Happiness’comprising none other than Shah Rukh Khan, Deepika Padukone, Abhishek Bachchan, Farah Khan, Sonu Sood, Boman Irani and Vivaan Shah. Dil Se Naachein Indiawaale, as a platform, calls for entries from dance enthusiasts across the length and breadth of the country to send in their ‘Happy Dancing’ videos and the shortlisted dancers will win an opportunity to showcase their acts in front of the ‘Agents of Happiness’.

Punit Goenka, MD & CEO, ZEEL says “Dil Se Naachein Indiawaale is Zee TV’s biggest Diwali extravaganza, introducing India to an all-new genre of dancing. The core idea is to spread happiness across the country through dance. We are pleased to partner with Shah Rukh in bringing this proposition alive. True to Zee TV’s positioning of Umeed Se Saje Zindagi, the show brings hope into the lives of countless dancers across the country who haven’t had the privilege of formal training. You don’t need to be flawless and technically brilliant in order to be appealing as a dancer, sometimes all it takes is a lot of heart!

Shah Rukh Khan said, “For our film, Happy New Year, we wanted to move away from the conventional format of city tours where we only get to spend a few minutes talking to the crowd in a mall or a movie theatre. This time we wanted to go out there and thank them by entertaining them and giving back the love they always give us. When Zee approached us with the concept of a show that celebrates the sheer happiness of dancing as against selecting the most trained and technically sound dancers, it instantly appealed. The concept also holds well with our film. This will be our unique way of promoting our film in different cities. It gives all seven of us – Farah, Deepika, Abhishek, Boman, Sonu, Vivaan & I – an opportunity to reach out to everybody in India who unknowingly respond to any rhythm or music. All of us will be performing and judging in this show. The idea is to spread cheer and happiness wherever we all go!”

While audiences await the launch of this exciting property, it has already created quite a stir amongst the advertisers’ fraternity, with Maruti Suzuki Alto K 10 coming on board as the title sponsor andAskmebazaar.com and L’Oreal Paris Fall Repair 3X stepping in as co-powered by sponsors. Zydus Cadilla, Nerolac, Liberty Shoes and Vicco have come on board as Associate Sponsors.

With the hottest celebrity panel ever on Indian television, an all-new genre of dancing and the first-of-its-kind dance tour with a mission to spread joy and happiness across the country, Dil Se Naachein Indiawaale,promises to be the biggest entertainment extravaganza this Diwali!

Starting 11th October, ‘Maruti Suzuki Alto K 10 Dil Se Naache Indiawale Co-powered byAskmebazaar.com & L’Oreal Paris Fall Repair 3X’
 will air every Saturday-Sunday at 9 PM, only on Zee TV.

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