What’s happening in the world of VAT? Our Global Managing Editor gives her daily round-up.
Poland
Finance Minister Mateusz Szczurek says lower VAT rates will be implemented in Poland by 2017. It has already notified the EU administration of the plans, and the European Commission agreed to lift the excess deficit procedures put on Poland to allow the VAT reduction. Source.
India
With the GST debate still ongoing, some pundits in India are asking if states should tax ecommerce firms. The argument is over whether retailers such as Flipkart and Snapdeal are providing a service or whether they should pay taxes for the goods being sold through their platforms. But the online industry fears any new taxation rules may end up hurting the growing sector. Source.
Croatia
Croatian Deputy Prime Minister Branko Grcic says that tax collections are up thanks to a stronger Croatian economy. The preliminary figures show the budget deficit for the first four months of this year was HRK2.5bn lower than at the same time last year, with Grcic attributing this mainly to increasing revenues from VAT and corporate income tax. Source.
Ghana
Despite the government announcing its intention to scrap the 20% tax on the importation of smart phones, checks by one publication have found the Ghana Revenue Authority continues to charge the 20% talk tax. Last year the finance minister Seth Terkper said the government wanted to help increase smartphone penetration in Ghana – currently at 15% - to help bridge the digital divide as communication in Africa shifts from voice to data. Mobile data is projected to grow 6.3 times between 2013 and 2018, but it is also expected that the increase in penetration will see an increase in revenue from Communication Service Tax, VAT and corporate taxes. Source.
South Africa
As the EU continues to work on its digital strategy, news from South Africa appears to show local companies are unable to compete with multinationals selling goods and services online in SA, partly as a result of local tax laws. Multinationals that sell digitally to the South African market do not have to comply with the same rules as local companies; foreign entities are only subject to tax on income derived from a source in the country. Source.
Germany
German consumers spent considerably more money on fair trade products last year, with only British customers spending more in the EU, ahead of the introduction of a pioneer fair trade label on sustainable clothes in the Federal Republic. Consumers in Germany attach increasingly more value to fair trade products. Sales in the fair trade market grew 26% in 2014 compared to the previous year, rising to €827 million. This is the “strongest absolute growth” since the existence of the fair trade label, explained Dieter Overath, managing director of the TransFair association, while speaking to journalists in Berlin. Source.
EU
The European Union’s Stability and Growth pact has been reviewed, with the UK given a new deadline to deal with its excessive deficit procedure (EDP). Finland was also warned it could be placed in EDP as the Commission’s country-specific economic policy recommendations for 2015 and 2016 was revealed. The executive recommended the closure of the EDP for Malta and Poland, while Croatia, Cyprus, France, Greece, Ireland, Portugal, Slovenia and Spain all remain in EDP. Source.