Multinational Financial System – Lost Worlds Fri, 11 Jun 2021 18:23:14 +0000 en-US hourly 1 Multinational Financial System – Lost Worlds 32 32 Global minimum tax: questions for global tax reform Fri, 11 Jun 2021 18:18:12 +0000

There has been some confusion over how parts of the recent G7 agreement on new tax rules for multinational companies might work. The new policies would target the largest and most profitable multinationals and introduce a global minimum tax.

The G7 deal is the subject of subsequent debate and agreement in the G20 and in more than 130 countries around the world. As the debates continue, it is important to understand the nuances of what is being discussed.

First of all, a question on the income and profitability thresholds: which companies are present and which are not? Will some large companies be cut regardless of their profitability? Second, some question the exclusions and whether countries will continue to grant tax preferences such as patent boxes under the global minimum tax or whether some countries would be excluded altogether.

On both issues, there are a lot of unanswered questions, but it’s worth exploring what has been discussed so far and how these issues might be resolved.

Part of the debate over global tax reform, “pillar 1,” would change the rules about where the biggest and most profitable companies pay taxes. the G7 press release said the targeted companies would pay taxes in countries where they make sales on at least 20 percent of profits exceeding a 10 percent profit margin.

For this to work, you need a definition of “the biggest” and “the most profitable”. If a business is “big” but does not have a very high profit margin, it may not have to comply with the new system. There are big companies (one in particular) that politicians have identified as one of those who must comply with the new rules.

It comes down to the question of how a business that might not meet the “profitable” metric would be held to the new rules. This is where what is called “segmentation” comes in.

For example, if you have a large multinational company that is a conglomerate with several lines of business, then perhaps the most profitable lines of business would be grouped into pillar 1. Part of the company could be piloted. by valuable software and have a 20 percent profit margin while other parts of the business are in manufacturing and distribution and only earn a 5 percent profit margin.

If, by itself, the software business met both the “big” and “profitable” thresholds for Pillar 1, then the software part of the business might have to adhere to the new rules while the less profitable parts of the business. manufacturing and distribution of the business would not.

The challenge for policy makers is how to define the dividing lines between industries. It is not too hard to imagine the tax authorities gerrymanding companies in the most beneficial way under the rules of the first pillar.

But there’s probably an easier (and less political) way to do it. Large corporations already provide their audited financial statements to shareholders. These statements are issued in accordance with multiple rules and regulations and are intended to reflect the business and economic realities of a large multinational corporation. Companies with multiple lines of business are already reporting profits by segment, so decision makers wouldn’t necessarily need to design something from scratch.

While it does not make sense for a policy to be designed with one (or more) specific companies in mind, segmentation based on financial statements makes sense in a Pillar 1 proposal that is already complex.

Without segmentation, a company with high profit margins could be incentivized to dilute its profitability by acquiring less profitable businesses. Segmentation offers a way to prevent this type of merger activity to avoid pillar 1.

Segmentation is not a new idea. Several pages have been devoted to segmentation in a policy plan published last fall. However, the overall approach to this plan was incredibly complex, and a lot likely changed as policymakers worked on a deal.

Basing carve-ins on something like financial reporting to shareholders should avoid some of the more difficult political and complex questions. It might not be a perfect solution, but like Richard Collier (one of the designers of Pillar 1) recently declared, “In pillar 1, nothing is ever easy.

The other big question that has received a lot of attention is whether there will be any exceptions to the global minimum tax, or “pillar 2”. As with the focus on a business for pillar 1, questions were asked about A country on the overall minimum tax.

Like Pillar 1 and segmentation, the idea of ​​waiving the global minimum tax is nothing new. that of last October global minimum tax blueprint is considering an option for a deduction for property, plant and equipment and labor costs when calculating the application of minimum tax. In the plan, this is a substance-based exclusion.

The idea behind such an exclusion is that if you have actual activities (called “substances”) even in a low tax jurisdiction, the minimum tax should not be so severe.

The question in the current negotiations is whether a deduction for assets and payroll will be sufficient for world leaders. In recent years, countries with preferential tax policies like patent boxes have adopted rules that require some economic substance for companies to benefit from lower tax rates.

Let’s say a reasonable amount of economic substance disables the global minimum tax in a low tax jurisdiction. This would mean that policies such as patent boxes, special economic zones and related tax preferences would continue to exist as long as companies do not artificially manipulate their profits to benefit from these preferences.

This would be the most generous form of substance exclusion, and would likely benefit many countries that have preferential tax policies.

The least generous form of substance exemption is having none at all, which the Biden administration proposed for the US version of the minimum tax.

Between the US position and the other end of the spectrum there are many alternatives, including my own recommendation for the design of the minimum tax base.

Whether businesses are excluded based on their industries, or operations in low-tax jurisdictions are excluded due to the presence of economic substance, time will tell. There is still a lot of work to be done, but these political questions must be resolved taking into account the need for simplicity and neutrality and an awareness of trade-offs rather than the politics surrounding certain companies or countries.

Launch the U.S. International Tax Reform Resource Center

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Bahamas ‘can’t lose sight’ of real G7 goal Thu, 10 Jun 2021 18:33:05 +0000


Editor-in-chief of the Tribune

The Bahamas “cannot lose sight” that members of the G-7 and other high-tax European states want to “wipe out” international financial centers (IFCs) such as this nation, a prominent accountant warned yesterday.

Craig A “Tony” Gomez, managing partner of Baker Tilly Gomez, told Tribune Business that the Bahamas must keep this goal in mind when determining how they will respond to the agreement of Group finance ministers. Seven (G-7) on a minimum of 15% of the global corporate tax rate.

He added that the weekend’s announcement was likely to have more of an impact on rival IFCs such as Bermuda, Cayman Islands and British Virgin Islands (BVI), as they researched precisely the type of relocation multinational revenue / profit corporation that is the main target of the G-7.

The Bahamas, on the other hand, has largely focused on managing private wealth through structures that typically use corporate vehicles as passive investment entities, making them less vulnerable to the proposed minimum global corporate tax. by 15%.

However, Mr Gomez suggested that the main impact could be to stifle any future flow of business or investment that the Bahamas may seek to attract multinational entities and companies. He indicated that the G-7 proposal, if adopted as a global standard, could mean that there is little benefit to using this country’s current “no tax” platform if income / profits are still subject to a 15% levy.

“You are attacking international jurisdictions that house multinational corporations. I do not know if the Bahamas has a significant part of this activity, ”explained Mr. Gomez. “But when multinationals in a jurisdiction start to restructure, it impacts their thinking about each country that operates in that orbit.

“While the Bahamas may not be well known or popular for multinational companies, once these types of companies start to strategize or rethink, it will impact any business the Bahamas could have done. get from a multinational entity. “

Urging the Bahamas not to ignore the overarching goals that many G-7 countries have nurtured for two decades, Mr. Gomez added: “We cannot lose sight of the fact that the stated intention remains the same among the G-7 and G-20 countries. It remains to eliminate the so-called tax havens.

“Countries and homes considered as tax havens, it remains the same strategy there. But our main activity is private wealth management, and the Bahamas is not a main center for multinationals. These are the institutions the Bahamas hasn’t really attracted over the years.

Mr. Gomez also questioned the impact of the G-7 proposal on countries like Barbados, with its network of double taxation treaties. These ensure that businesses domiciled in Barbados are taxed at the island’s lowest rate rather than the home country’s higher rate when profits and income are repatriated, which is why so many Canadian companies have headquartered there in the Caribbean, but the minimum rate of 15% would seem to trample all of these deals.

Much work remains to be done to enforce the G-7 minimum global corporate tax of 15 percent. Few details on how this will work in practice have yet to be released, and there were several signs yesterday that global unity is already unraveling and will be difficult to achieve.

Members of Congress and Republican senators in the United States called the proposal “crazy” and threatened to block its passage by the legislature. Pat Toomey, a Republican senator from Pennsylvania, was reported by the British Guardian newspaper as saying: “The fact that they had to try to persuade all these other countries to make sure they raise their taxes is an admission of the damage. that we suffered. do to our own country.

And Republican Senator John Barrasso of Wyoming called the plan “anti-competitive, anti-American and harmful to us as we try to continue growing the economy as we emerge from a pandemic.”

The Bahamian government, in its response to the G-7 decision, pledged that it would not be intimidated by the minimum 15 percent global corporate tax deal. The finance ministry, in a statement, said it was assessing whether there were implications for the Bahamas’ national tax system and the international financial services industry.

He added that this country “reaffirms its sovereign right to determine the tax structure best suited to the country’s ongoing development” in response to the declaration of the world’s most powerful economies that they have reached an agreement on how to fight against tax evasion by large multinationals. – in particular those of the so-called “digital” economy.

“The Ministry of Finance is assessing the impact of these proposals and the implications they may have for the Bahamian national tax system,” he said in response to the G-7 announcement. “The Bahamas reaffirms their sovereign right to determine the tax structure best suited to the country’s ongoing development.

“Nonetheless, the ongoing multilateral discussions are timely given the Prime Minister’s recent announcement in the budget speech regarding the ministry’s impending comprehensive tax study. The outcome of this in-depth empirical assessment will inform ongoing tax reform efforts in pursuit of greater justice and fairness in the country’s tax system.

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El Salvador enacts Bitcoin law, ushering in a new era of global monetary inclusion Thu, 10 Jun 2021 02:26:53 +0000

On Wednesday, June 9, the Legislative Assembly of El Salvador made history by officially adopting bitcoin as legal tender, with nearly three-quarters of the legislature voting in favor. If the new law works as intended, it has the potential to transform El Salvador into one of the world’s most important financial centers and affect the way people around the world use digital currencies.

History!Salvadoran President Nayib Bukele exclaimed on Twitter after the vote at around 2 a.m. EST on June 9. And, indeed, the bill is historic on several fronts.

How the Salvadoran bitcoin standard will work

According to legislative text, under the new law, “every economic agent must accept bitcoin as a means of payment when offered to him by anyone who acquires a good or a service”: a simple definition of what it means to be legal tender. “Tax contributions can be paid in bitcoin” as well as all other legal obligations, and “bitcoin exchanges will not be subject to capital gains tax like any legal tender.” And “bonds expressed in US dollars, existing before the date of entry into force of this law, can be paid in bitcoin”.

The US dollar will also be legal tender in the country and will be used as the “base currency” for accounting purposes.

The bill anticipates many practical considerations related to the adoption of bitcoin as legal tender.

First, the law creates exceptions for those “who do not have access to technologies that will allow them to conduct bitcoin transactions.” The Salvadoran government will “promote the training and mechanisms necessary for the population to access bitcoin transactions”.

Second, the Salvadoran government will establish a trust of $ 150 million with the Development Bank of El Salvador (Banco de Desarrollo from El Salvador, or BANDESALE), which will exchange the bitcoin that businesses and individuals receive for US dollars at market prices, for those who don’t want to hold bitcoin. This way, bitcoin adoption will grow organically across the country, and those who find bitcoin’s volatility too risky won’t have to keep it on their balance sheets.

“The purpose of the trust fund is not to make money, but to support this decision to have bitcoin as legal tender,” President Bukele said at a press conference. Twitter spaces conference call hosted by Nic Carter of Castle Island Ventures. “It does not involve the Federal Reserve or even our central bank.”

Third, while Salvadorans will be free to use any compatible wallet to interact with the new bitcoin-based monetary system, they will have the option of using an official government-approved smartphone wallet designed by Jack Mallers. . Hit.

Strike helped launch the use of bitcoin in El Salvador; his Lightning networkThe backend enables fast transactions with minimal fees: essential functionality for daily payments in a low income country. (In the United States, professional footballer Russell Okung used Strike to convert paychecks of the Carolina Panthers in bitcoin.)

A monetary version of disruptive innovation

Clayton Christensen, professor at Harvard Business School, coined the term “breakthrough innovation“To describe innovations that come from” a niche market that may seem unattractive or inconsequential for incumbents in the industry “, but which end up being redefine an industry. Think about how low-cost Japanese automakers like Honda and Toyota entered the US market with reliable, affordable, low-margin compact cars, and eventually made their way into the higher-margin luxury segment. with Acura and Lexus. The Detroit Big Three initially ignored and mocked Japanese cars, but eventually lost market share and demanded federal bailouts to stay afloat.

What El Salvador is doing with bitcoin follows exactly the same pattern. Many people in the US and Europe scoff at bitcoin, criticizing its volatility and high transaction costs, believing that the US dollar and the euro work perfectly, without the need for alternatives.

El Salvador sees it differently. A bitcoin currency standard, supported by the Lightning Network, allows Salvadorans living in the United States and elsewhere to send money home without the significant fees common to Western Union and other international issuers. If all Salvadoran emigrants used the Lightning Network for their remittances, an additional $ 1 billion could be injected into the Salvadoran economy each year.

Additionally, smartphone interfaces like Strike allow easy transfer of funds, denominated in dollars or bitcoins, for everyday purchases like groceries. As noted above, under the new Salvadoran system, traders can instantly convert received bitcoin back to dollars, or keep bitcoin in their accounts if they prefer.

Salvadorians first piloted this system in Zonte “Bitcoin Range“, and it is a success. insightful interview with Stephan Livera, the founders of Bitcoin Beach, Michael Peterson and Nicolas Burtey, described how their wallet design has evolved to meet the needs of low-income Salvadorans.

“Transaction costs [with the base layer Bitcoin network] continued to gain momentum. And we were seeing transaction costs of $ 3, $ 4… we knew we had to change something or it just wouldn’t be sustainable, ”Peterson said. This issue prompted Peterson and Burtey to deploy the Lightning Network at Bitcoin Beach, thereby eliminating the problem of high transaction fees.

Over time, if Salvadoran bitcoin law is successful, the country will have proven for the first time that bitcoin can be deployed by a sovereign nation state. both as a store of value, like gold, and also as a medium of exchange for daily transactions.

Once El Salvador demonstrates that bitcoin is usable in this way, in a low-income country where 70% of residents do not have a bank account, the nation will have proven that bitcoin is usable. all over this way, including in the United States.

Zero carbon bitcoin mining in El Salvador

One of the most interesting things to come out of Nic Carter’s Twitter Spaces call with President Bukele was the opportunity to make El Salvador a center for zero-carbon bitcoin mining. Elon Musk and other bitcoin critics have argued that the computing power used to secure the Bitcoin network excessively increases atmospheric carbon dioxide.

Coincidentally, El Salvador is rich in clean, carbon-free geothermal energy. Almost A quarter electricity in El Salvador is produced from volcanic heat which does not require carbon emissions. Two-thirds of El Salvador’s geothermal energy remains untapped: enough to feed 3 to 4% of the Bitcoin network.

During the call, Bukele was asked whether or not El Salvador was interested in establishing bitcoin mining facilities in the country. He said the thought hadn’t occurred to him before, but the idea had substantial potential:

We have a plan, it has nothing to do with bitcoin, but we have geothermal energy here … volcanoes [that turn] water into water vapor and that makes energy. So we produced this energy [beginning] 50 years ago. But… we waste a lot of energy transporting energy from geothermal power plants to cities. We therefore wish to promote… on the outskirts of factories… these industrial parks, where you can set up your factory and you will receive cheap, 100% clean, 100% renewable, 0% CO2 emissions [energy]. And we wanted to do it not because of bitcoin, but because people want to invest in factories that won’t have a carbon footprint… Probably someone wants to set up a mining facility with cheap, clean energy. and renewable.

Sure enough, later that day on June 9, Bukele tweeted that he had “instructed the chairman of LaGeo,” the state-owned geothermal energy company, “to put in place a plan to provide facilities for the bitcoin mining with a very good clean, 100% renewable, [zero-emissions] the energy of our volcanoes.

Energy costs are the biggest expense for bitcoin miners; in El Salvador, miners could generate significant income for the country and significantly reduce the cost of electrifying rural areas.

Will other countries follow El Salvador’s example?

In response to El Salvador’s bitcoin movements, politicians in several other Latin American countries have expressed their desire to bring a bitcoin standard to their country. The first was Carlitos Rejala from Paraguay, who hinted at on Twitter that Paraguay was working with PayPal on such a project.

Panamanian lawmaker Gabriel Silva followed, tweeting: “This is important. And Panama cannot be left behind. If we want to be a true technological and entrepreneurial hub, we must support cryptocurrencies. We will prepare a proposal to present to the [legislative] Assembly. If you are interested in building it, you can contact me.

Legislators from Brazil, Mexico, Colombia and Argentina soon followed. None of these figures have the same influence in their governments as President Bukele in El Salvador, but some of them could very well succeed in following El Salvador’s example, effectively creating a multinational consortium of countries deploying bitcoin as their currency. legal.

Even if other countries do not follow El Salvador’s lead, the fact that a single sovereign nation-state would adopt bitcoin as legal tender is of great importance.

Salvadoran Bitcoin Law creates what Bukele calls “a safe and predictable country for crypto,” a secure and predictable legal environment for Bitcoin entrepreneurs to create new and innovative tools. This environment will attract many of the industry’s most talented and creative people to El Salvador, enriching native Salvadorians and accelerating the development of a more inclusive global financial system.

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G7 tax deal meets friction in divided Washington Wed, 09 Jun 2021 09:00:21 +0000

Joe Biden’s plan to overhaul the international tax system will face a tough stint in the U.S. Congress as Republicans threaten to reject a possible Senate deal where a two-thirds majority is needed for approval.

Washington’s efforts to break a diplomatic deadlock over how global corporations are taxed paid off this weekend when the G7 backed a global minimum rate of at least 15% and agreed that countries should have the right to tax some of the biggest companies in the world. profits where they are generated.

But approving changes to international tax treaties would require the support of a qualified two-thirds majority in the Senate, posing a problem for the Biden administration as G7 countries pursue a broader deal being negotiated. at the OECD. The Senate is divided equally between Democrats and Republicans.

There was “a big question mark as to whether and when” an international tax deal could be ratified in Washington, said Brian Jenn, a former US Treasury official. “I would say the prospects for Congress to implement any deal remain very uncertain at best.”

Senior Republican lawmakers have lined up to criticize the fledgling multilateral agreement as damaging the competitiveness of U.S. businesses. They accused the US president of ceding tax rights to other countries and failing to resolve a long-standing battle over digital taxes.

Pat Toomey, Republican Senator from Pennsylvania, called the global minimum tax “crazy.”

“Certainly the fact that they had to try to persuade all these other countries to make sure they raise their taxes is an admission of the damage we are doing to our own country,” Toomey told reporters on Capitol Hill. He added: “They certainly wouldn’t have the votes to endorse a treaty like this that they’re considering.”

Senator John Barrasso of Wyoming said the deal was “bad” for the United States. “This tax will be anti-competitive, anti-American and harmful to us as we try to continue to grow the economy as we emerge from a pandemic.” Mike Lee, a senator from Utah, tweeted a Washington Post article on the G7 deal with the words: “This is what a cartel looks like.”

Discord is also gearing up for the future of taxes on digital services in countries like the UK, Italy and France, which are designed to ensure that some of the world’s biggest companies, including US tech giants such as Facebook, Apple and Google, pay more taxes. in countries where they have a weak physical presence.

The new US proposal attempts to replace digital taxes with a formula in which the world’s largest and most profitable companies would be subject to the new rules, regardless of industry, based on their income levels and earnings. profit margins.

As lawmakers on Capitol Hill have united across the aisle to oppose digital taxes on U.S. businesses, Republicans are hinting they might argue that the broader taxation of large corporations is targeting still unfairly the American multinationals. Toomey called the US proposal a “digital services tax under a different name, broader in scope.”

Last week, Mike Crapo, the top Republican on the Senate Finance Committee, wrote to the US Treasury expressing concern that a “disproportionate amount of reallocated profits” included in the new plan “may be those of ‘Leading US companies – namely, US Technology, Pharmaceuticals and Consumer Products Companies’.

Crapo questioned what the United States would get in return for ceding U.S. companies’ taxing rights to foreign countries, and demanded a commitment from the Treasury that countries would repeal their digital taxes once an agreement is reached. of the OECD would be concluded. France, Italy and the UK have all refused to abolish their digital taxes until the US passes the necessary legislation.

Janet Yellen, Secretary of the United States Treasury, stepped in to address concerns from Republican lawmakers. In a letter to Crapo, she replied, “My goals and yours on this topic are aligned. We fully agree that any international tax deal concluded at the OECD must neither harm American businesses and workers nor undermine United States fiscal sovereignty ”.

In the letter, seen by the Financial Times, Yellen assured the senator that “multinational corporations around the world” would be affected by the so-called pillar one which plans to tax corporations in countries where they sell, and that the proposal would not only affect US companies.

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Biden must make China pay for his actions against COVID Mon, 07 Jun 2021 23:10:00 +0000

President Joe Biden flies over the pond on Wednesday to meet with European leaders. He says the goal is to “deliver real results” on critical issues such as climate change and cybersecurity. Yet the president dodges the most important problem: the cause of the pandemic.

Biden should rally his allies to act in unison, urging China for answers – and reparations. Because the evidence is mounting that the Beijing regime is guilty of manslaughter.

A column in the Wall Street Journal over the weekend, convincingly argued that the coronavirus genetic sequence contains a sequence that is very unlikely to occur naturally. Doctor Stephen Quay and physicist Richard Muller note that the sequence is exactly what researchers would choose to design a virus for maximum infectivity against humans, rendering the theory of natural origin tenuous at best. Other recent analyzes of the virus also indicate that the Wuhan virology lab – and not nature – is the source of the pandemic.

It is true that in science, nothing is settled; new evidence may yet emerge that point in another direction. But there is no doubt that China acted criminally once the virus began circulating in Wuhan in 2019. Communist Party authorities have concealed the existence of the virus for weeks, denying that it could spread. spread from human to human, muzzled their own scientists, and blocked outside scientists from investigating – all in violation of Articles 6 and 7 of the World Health Organization’s International Health Regulations.

Beijing is a repeat offender. In 2003, he hid the existence of the deadly SARS virus until it spread around the world, leaving a trail of death.

This time, Biden is expected to lead a multinational effort to isolate China, get answers and demand reparations. Without answers, warns Baylor doctor and microbiologist Peter Hotez, there will be COVID-26 and COVID-32, which means more viral disasters.

Biden just goes through the motions, however, appearing to take action but do nothing. He called for a 90-day investigation by US intelligence agencies. Yet, as Hotez says, “we have taken intelligence as far as possible”. Scientists are to collect laboratory samples from Wuhan and biological samples from the first COVID patients.

The Biden administration has also called on the WHO to investigate again. The WHO has allowed China to select the first investigative team, deny access to biological evidence, and veto findings Beijing dislikes. A second WHO investigation is pointless. The UN outfit remains a puppet for China.

To get the truth, The Post came up with an important remedy: a commission created by an act of Congress backed by non-partisan scientists – not like Anthony Fauci and Francis Collins of the National Institutes of Health. These men have misled Congress and the nation with a naive globalist point of view that has put us in danger.

Fauci told Congress that the Wuhan lab staff are “knowledgeable and trustworthy scientists,” not to mention their germline war plans for the Chinese Communist Army. Indeed, Fauci himself could become a subject of the commission’s inquiry into his role in directing U.S. taxpayer funds to support deadly “gain-of-office” research in Wuhan.

Last week, Biden said China believes that in a few years it will “own America.” What is your strategy, Mr. President? For the moment, only weakness.

This is in stark contrast to former President Donald Trump, who said on Saturday night that “the time has come for America and the world to demand reparations and accountability from the Chinese Communist Party.” Western governments should hand Beijing a reparations bill for its lies and, if necessary, cancel Western debt to China as a collection measure.

Fears that such a move would harm the global financial system are less important if all major countries collectively agree to apply reparations against China in this way.

If the laboratory leak theory is definitively established, it means Beijing’s actions have led to large-scale carnage: the virus toll so far is nearly 4 million dead, including 600,000 Americans – more millions of deaths or additional damage as a result of blockages.

Unless China is forced to pay, more Americans will pay with their lives in the future.

Betsy McCaughey is a former lieutenant governor of New York.

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Why Scotland-based businesses will be crucial after independence Mon, 07 Jun 2021 04:00:39 +0000 THROUGHOUT our series of articles, the Scottish Banking & Finance Group has provided insight into how, with our own currency, Scotland can take control of the economy through government money creation, by working with the central bank, through taxation and through government. borrowing, ”which is actually a process of providing a safe place for citizens and businesses to save.

Trade unionists know independence will fail if we don’t have our own currency, so focus instead on spreading fears that the Scottish currency is ‘weak’ and that Scotland’s budget deficits and public debt are too high and unsustainable. This assumes that the deficits are “bad”, which is sheer economic nonsense. It is austerity that is bad. “Public debt” is not a problem at all as the borrowing will be in our own currency and mainly from the Scottish public.

READ MORE: Why a ‘Goldilocks’ currency will be ideal in an independent Scotland

Now it is important to discuss what Scotland can do with these economic powers. The first question is to decide what we want to do – what are the collective choices and priorities of the Scottish people? Making these choices democratically depends on Scotland having a democratic constitution that gives the people a voice to decide our future and ensure that our political institutions and processes hold our elected leaders accountable.

We will have to choose our priorities because we cannot do everything at once and cannot have everything we would like to have. We have to make choices because our human and physical resources are limited and the planet also places limits on what is possible.

This means that we have to develop an industrial strategy and think about trade – what we can produce ourselves with the resources at our disposal and what we will need to acquire from others, either by accepting foreign investment in Scotland or by importing from ‘elsewhere.

Suppose Scotland chooses to make maximum effort to initiate and complete the transition to a zero carbon economy as soon as possible. This will require the allocation of a very large part of our resources in order to build all the new infrastructure for a zero carbon economy. This will inevitably mean diverting resources from other sectors of the economy and allocating capital accordingly.

To produce the things we need to live well, we may have to decide to bring in additional resources by accepting foreign investment and expertise from abroad. One example is the production of electric vehicles – while Scotland has high value assets such as the Alexander Dennis bus company, which produces electric buses and fire trucks, we currently have no manufacturing capacity. of electric cars.

Such a capacity exists elsewhere – in the UK and in Europe for example – so we will have to either trade (import electric cars), or develop our own domestic production capacity, or invite foreign manufacturers to set up here.

The National: Alexander Dennis bus factory in Falkirk

Dennis was once a Scottish company, but is now owned by NFI, a Canadian bus manufacturer. This means that the profits are now coming out of Scotland. This is precisely the kind of business that should remain Scottish, but to do so requires capital to be made available to our national financial system.

We have witnessed a similar foreign takeover of strategically important Scottish assets such as steel and aluminum production by Tata and then Liberty Steel. Without capital provided by our own financial sector, Scotland will continue to see foreign takeovers of the production capacity we have.

READ MORE: Why an independent Scotland’s deficit can be good for a healthy economy

Steel and aluminum are materials of strategic importance to our economy and production capacity must remain the property of the Scots and ‘clean’ manufacturing methods must be adopted, using electric foundry technologies. Again, domestic capital must be allocated to allow this transition to occur.

We are currently seeing the threat of closures and job losses at the McVitie factory in Glasgow. It is a 200-year-old Scottish company that was part of the Scottish company United Biscuits, acquired in 2014 by a Turkish multinational Yildiz Holding (of which Pladis is a subsidiary).

Scotland simply cannot afford a food producer like this to fall under foreign control and the fact that they did is the result of our financial system’s failure to keep it in ownership. and instead seek short-term financial returns by facilitating takeover.

Foreign investment in Scotland may be necessary when we lack the capacity to produce priority infrastructure, goods and services, but we really need to prevent the capacity we have from being taken over by foreign companies. Ensuring that Scottish financial institutions provide the capital necessary to keep our businesses and infrastructure under national control is a top priority for reforming our banking and financial system.

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India should benefit from a global corporate tax pact of at least 15% foreign investments to pursue: Experts Sun, 06 Jun 2021 09:14:00 +0000 In September 2019, India had reduced the corporate tax for domestic companies to 22% and to 15% for new domestic manufacturing units.

India is expected to benefit from the global corporate tax pact of at least 15% signed by the richest countries in the world, as the effective domestic tax rate is above the threshold and the country will continue to attract investment. tax experts said on Sunday.

Finance ministers from the G-7 countries, including the United States, United Kingdom, Germany, France, Canada, Italy and Japan, reached a landmark agreement on Saturday on the imposition of taxes. multinational corporations according to which the minimum global tax rate would be at least 15%. They also agreed to put in place measures to ensure that companies pay taxes in the countries where they operate, a measure aimed at closing cross-border tax loopholes.

Nangia Andersen India President Rakesh Nangia said the G7 commitment to a global minimum tax rate of 15 percent works well for the US government and most other Western European countries. However, some low-tax European jurisdictions such as the Netherlands, Ireland and Luxembourg and some in the Caribbean rely heavily on tax rate arbitrage to attract multinationals.
“The Global Compact would face the challenge of putting other major nations on the same page, as this infringes on the sovereign’s right to decide a nation’s tax policy,” Nangia added.

In September 2019, India had reduced the corporate tax for domestic companies to 22% and to 15% for new domestic manufacturing units. The preferential tax rate has also been extended to existing domestic companies, under certain conditions.

AKM Global Tax Partner Amit Maheshwari consulting firm said India stands to benefit as it is a big market for a lot of tech companies. “It remains to be seen how the distribution between the countries of the market would be made. In addition, the global minimum tax of at least 15% means that in all likelihood India’s concessional tax regime would still work and India would continue to attract investment, ”Maheshwari added.

EY India’s national tax officer Sudhir Kapadia said the Global Compact on Business Taxation was a pact for the future, especially for large developing countries like India, which would still have great difficulty in keeping corporate tax rates artificially lower in an attempt to increase much-needed foreign direct investment. investments in the country.

“Even the recently announced 15 percent lower rate for new manufacturing units in India roughly hits this new threshold, so not affecting that much-needed boost to manufacturing in India. Equally important is the explicit granting of taxing rights to “market countries” for a share of the global profits of multinational corporations, thereby aligning the right to tax with the place of economic contribution, ”Kapadia added.

The decision of the Group of Seven (G-7) advanced economies would be submitted to the G-20 countries, a group of developing and developed countries, at a meeting scheduled for July in Venice.

Nangia said that since India’s effective tax rate is always higher than the global minimum tax rate, it would not impact companies doing business in India. “The global minimum rate has an impact on businesses using a low tax jurisdiction to achieve a low global tax cost. In addition, India attracts foreign investment due to its large domestic market, quality workforce at competitive prices, strategic location for exports and a thriving private sector ”, a- he added.

Maheshwari said the G-7 deal will carry a lot of weight in the G20 / OECD discussions, but there is still a lot of work to be done to reach a global consensus. “Countries like Ireland are facing a tough time and may oppose this minimum tax rate. However, a minimum tax of 15 percent may not generate substantial income and it is possible that other countries want a higher minimum overall tax rate, ”he added.

In a statement released on Saturday, OECD Secretary-General Mathias Cormann said the consensus among G7 finance ministers, including on a minimum level of global taxation, is an important step towards the global consensus needed for reform the international tax system.

“There is still important work to be done. But this decision gives important impetus to the upcoming discussions between the 139 countries and jurisdictions that are members of the OECD / G20 Inclusive Framework on BEPS, where we continue to seek a final deal that ensures multinational companies pay their fair share everywhere, ”added Cormann.

Deloitte India partner Rohinton Sidhwa said the minimum tax rate advantage should increase by first giving the right to tax a slice of profit from large global digital multinationals. Second, it will end the various digital taxes that have proliferated around the world like the equalization levy in India, he said, adding that thirdly, it paves the way for changes to global tax treaties in accordance with consensus reached.

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Cyber ​​attack on food supply follows years of warnings Sat, 05 Jun 2021 16:04:39 +0000

Hardly any mandatory cybersecurity rule governs the millions of food and beverage companies that make up about a fifth of the U.S. economy – there are only voluntary guidelines. The two federal agencies that oversee the sector include the USDA, which has faced criticism of Congress for the way it secures its own data. And unlike other industries that have formed information sharing collectives to coordinate their responses to potential cyber threats, the food industry dissolves his group in 2008.

Now food producers face the fact that disruptive cyber attacks are part of what Agriculture Secretary Tom Vilsack calls their “new reality.”

National security threats to the agricultural supply chain have not received enough attention across the federal government, argued Representative Rick Crawford (R-Ark.), Who sits on both House Intelligence and Agriculture committees.

“Too often agriculture is dismissed as, ‘It’s important but it’s not that big,'” Crawford said in an interview. “If you eat, you are farming. We must all recognize that this is a vital industry and that this [incident] illustrates this.

The North American Meat Institute, which represents meat packers, declined to comment on the state of the industry’s cybersecurity measures or potential changes as a result of the hack.

The downside of “huge technology”

The wake-up call from the Food Protection and Defense Institute at the University of Minnesota arrived in the most modest of packaging: as one of over 180 official comments filed with the USDA for a presidential decree on securing the country’s supply chains.

“Rapidly spreading ransomware attacks could simultaneously block operations in many more factories than those affected by the pandemic,” the institute warned in its file of May 18, noting that Covid-19 last year forced the closure of slaughterhouses, raising fears of a meat shortage and soaring prices.

It was just the latest in a string of warnings from national security and law enforcement agencies, private cybersecurity firms and university researchers.

In November, the cybersecurity firm CrowdStrike said in a report that its threat research service had seen a ten-fold increase in interactive intrusions – or “hands-on-keyboard” – affecting the agriculture industry in the past 10 months. Adam Meyers, the company’s senior vice president of intelligence, said that of the 160 hacking groups or gangs the company is tracking down, 13 have been identified targeting agriculture.

A 2018 report of the Ministry of Homeland Security examined a range of cyber threats the industry faces as it embraces digitized “precision farming”, while the FBI said in April 2016 that farming is “increasingly vulnerable to cyber attacks as farmers increasingly depend on digitized data.

The industry also offers many targets: Department of Homeland Security Cyber ​​Agency Notes, the agriculture and food sector comprises “approximately 2.1 million farms, 935,000 restaurants and over 200,000 registered food manufacturing, processing and storage facilities”, almost all of which are privately owned.

For decades, however, most farmers and food manufacturers have prioritized productivity over everything else, including safety, trying to make profits in an industry with chronically narrow margins and meet demand. growing global demand for food. In their quest for efficiency, meat processing plants are increasing the speed of their processing lines and investing in robotics to cut carcasses faster. Farmers are embracing high-tech innovations like drones, GPS mapping, soil sensors, and autonomous tractors, with vast data behind it all.

All of this connectivity and automation comes at a cost.

“That’s part of the downsides of having a huge technology, a huge ability to transform a lot of data and become more efficient,” Vilsack said. “There are risks associated with this. “

“No industry is prohibited”

The disruption of JBS, which controls nearly a quarter of livestock processing in the United States, has raised concerns primarily about the impact on meat markets. USDA data shows wholesale beef prices have risen steadily every day since the hack, with prime cuts exceeding $ 341 per hundred pounds on Thursday morning.

Higher prices are just one of the many potential consequences. According to the Food Protection and Defense Institute, a group recognized by DHS, cyber attacks could also result in the sale of contaminated food to the public, financial ruin for producers, and even the injury and death of factory workers.

In its public comments to the USDA, the institute highlighted gaping gaps in industry preparedness, including a “widespread lack of awareness across the industry” and lack of guidance from government regulators. . He also noted that much of the industry relies on decades-old custom-written software that is essentially impossible to update, as well as outdated operating systems like Windows 98.

“The agriculture industry is probably lagging behind some of the other industries that have been hit hardest by cybercrime,” such as the financial sector, which has long been a prime target for criminals, said Michael Daniel, president and CEO of the Cyber ​​Threat Alliance, a non-profit organization.

However, the JBS hack, like the ransomware attack on Colonial Pipeline in May and the gasoline-buying panic that followed, shows that “no industry is banned,” he added. . Ransomware operators “are going to go where they think they can extract the money.”

Daniel, a cyber coordinator under the Obama administration, said he would recommend that industry executives take basic steps, such as assessing their company’s digital readiness and reviewing federal guidelines for security.

“What I would tell them is: you have to really think about how you manage your cybersecurity risk, just like you manage commodity price risk, just like you manage natural disaster risk, just like you manage the legal risk, ”said Daniel.

The White House advised in the same way to all companies Thursday to strengthen their defenses, including installing the latest software updates and requiring additional authentication for anyone logging into their systems.

Meyers, of CrowdStrike, said the seriousness with which cybersecurity is viewed varies “depending on who you talk to in the agriculture industry.” He said multinational conglomerates whose intellectual property is worth protecting make it a priority, but “as you move down the food chain, so to speak, they probably think less seriously about it.”

The JBS hack “is the big red flag for all these small, medium and large businesses. You can’t put your head in the sand and hope it doesn’t happen to you because it does, ”Meyers said. “You have to be prepared and you have to prepare to fight. Because if you don’t, you are going to pay a ransom and someone is going to eat your lunch.

A call to Congress to act

Congress may have to step in to help resolve the situation, said Crawford, the member of the House of Commons from Arkansas, who reintroduced legislation earlier this year that would establish an intelligence bureau within the USDA. The office would serve as a channel for the department to keep farmers informed of threats to their livelihoods, including espionage and cyber operations by malicious actors.

One of the main reasons the industry is unprepared for dangers like ransomware is that the U.S. intelligence community has failed to consider national security threats to agriculture as much as it does. it should, Crawford argued.

He added that communication needs to go both ways: Businesses need to get their cyber experts to share what they see with their government counterparts. No such requirement exists for the food industry.

“What I would advise the private sector to do is be proactive on these things as much as possible,” said Crawford, who is hosting a forum this summer on “Business Intelligence and Chain Integrity. procurement “which will bring together cybersecurity experts, representatives of the underground community to educate local businesses on digital threats.

The USDA has not proposed any significant policy changes in the wake of the JBS attack, instead asking food companies to take voluntary steps to protect their IT and infrastructure from cyber threats. Vilsack highlighted on Thursday DHS Cyber ​​and Infrastructure Security Agency guidelines that businesses can adopt for their own protection.

There is no shortage of policy recommendations from experts in the field. Most of the proposals involve training industry leaders and employees, setting minimum standards for cybersecurity, or improving coordination between companies and agencies.

Another step recommended by the Food Protection and Defense Institute: USDA and DHS should work with industry to create a cyber threat clearinghouse – known as “information sharing and analysis center»- to collaborate in the study and management of digital risks.

Other critical industries, notably the electricity and finance sectors, already have their own ISACs, but the food industry does not. Instead, some food companies have joins a larger information sharing group which covers the information technology industry, said Scott Algeier, executive director of IT-ISAC.

“They wanted to engage with other companies but didn’t have ISAC. So they applied to us, ”said Algiers, whose organization also provides a threat-sharing forum for the electoral industry.

The nonprofit Internet Security Alliance has called for federal grants and other incentives for food companies to step up their cyber defenses.

“The increase in cybersecurity will cost money, and finding additional funding will not be easy for the sector as it is governed by tight margins and faces a very competitive global market,” the group wrote on its website.

Helena Bottemiller Evich contributed to this report.

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Global financial leaders start talks on tax overhaul Sat, 05 Jun 2021 01:18:53 +0000

A spokeswoman for the Treasury Department did not comment.

Senior economic officials from Spain, Italy, France and Germany expressed optimism on Friday morning that the tax negotiations, which have been going on for several years, are on track. In an essay published in the Guardian newspaper, they suggested that the Biden administration’s new negotiating approach was more constructive than the tactics of the Trump administration, which walked away from the negotiating table last year.

“With the new Biden administration, there is no longer a threat of a veto over this new system,” they wrote, adding that they believed a global tax deal could be reached by July. “It’s within our reach.

Officials hope a G7 deal will lead to even wider support when the Group of 20 finance ministers meet in Italy next month and pave the way for a final deal when G20 leaders meet in October. The negotiations are being conducted through the Organization for Economic Co-operation and Development, the Paris-based international policy agency that counts the world’s richest countries among its members.

Completing the deal will be complicated and will force countries to change their laws to conform to what has been agreed in principle. Republican lawmakers in the United States have previously expressed concern over the proposals.

The Biden administration continues to consider the possibility of retaliatory tariffs against European countries that have adopted digital taxes.

Earlier this week, the administration imposed tariffs on around $ 2.1 billion worth of goods from Austria, Britain, India, Italy, Spain and Turkey, but it immediately suspended these tariffs for 180 days to allow negotiations to continue.

The G7 countries are Great Britain, Canada, France, Germany, Italy, Japan and the United States. The summit is the first in-person gathering of top officials from the world’s advanced economies since the pandemic emerged in early 2020 and turned such events into virtual business.

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Travel agencies take another blow from latest government restrictions Fri, 04 Jun 2021 16:29:37 +0000

Airlines and travel agencies have taken another blow in the stock market as fallout from the UK government’s decision to remove Portugal from its green list of countries hit investors.

No other country has been added to the green list for travelers and the industry has reacted furiously to the measures. Investors weren’t impressed either, wiping millions of dollars off the companies.

The market caps of EasyJet, Ryanair Wizz Air IAG and engine manufacturer Rolls-Royce all fell by a combined total of almost £ 800million – after falling by £ 2 billion on Thursday.

Ryanair shares fell 1.3%, losing 0.22 cent to 16.16 euros; IAG lost 0.9%, closing at 1.84p to 196.3p; EasyJet closed 25.2 pence, or 2.6%, at 934 pence; Wizz Air lost 153p, or 3.3%, to 4,533p and Rolls-Royce lost 2.36p, or 2.15%, to 107.32p.

But Michael Hewson, chief market analyst at CMC Markets UK, pointed out that there had been some benefits for other companies.

He said: “While airline stocks are still under pressure from yesterday’s traffic light system changes, companies like Ocado and Just Eat are among the top performers based on expectations of easing. slower restrictions. “

Ocado shares closed up 55.5 pence to 1,884 pence and Just Eat Takeaway rose 126 pence to 6,411 pence.

The internationally-focused FTSE 100 also failed to pull off much of the latest US non-farm payroll figures, which ended in a wet firecracker, helping the market close the day. up just 4.69 points – or 0.07% – to 7,069.04.

The German Dax ended up 0.39% and the French Cac 0.12%.

Currency markets were also not thrilled, with the pound remaining stable against the euro and the dollar at 1.164 and 1.417 respectively as markets closed.

In business news, the main changes have come in the form of leadership changes.

AstraZeneca has brought in the chief financial officer of its new $ 39 billion (£ 28 billion) subsidiary to take over as chief financial officer.

Aradhana Sarin of Alexion Pharmaceuticals will assume this role later this year, once the agreement between the two companies is concluded. Stocks closed 107p higher at 8,055p.

And mining group Rio Tinto has asked a former Australian minister for aboriginal affairs to join its board of directors after facing a publicity storm in the country over the destruction of an ancient site.

Ben Wyatt will join the company as a non-executive director on September 1, Rio Tinto said. Shares closed up 47p at 6,219p.

In AIM’s junior market, oil company Lekoil revealed a bizarre discussion between the board, who wants the CEO to go missing, and the boss who says he’s sticking around. Stocks plunged 6.15% to 1.525p.

And London-listed virtual reality tech company VR Education saw its shares rise 9.1%, up 1.5p to 18p, as bosses said its software platform Engage has been strongly adopted by multinational companies.

The biggest hikes in the FTSE 100 were Ocado, up 55.5p to 1,884p; Renishaw, up 140p to 5,580p; Entain, up 34.5p to 1733p; Halma, up from 52p to 2640p; and Just Eat Takeaway, up 126p to 6.411p.

Rolls-Royce was the biggest drop in the index, down 2.36 pence to 107.32 pence; ABF, down from 47p to 2299p; Pershing Square, down from 50p to 2560p; Bunzl, down from 39p to 2272p; and Standard Chartered, down 8.5p to 495.9p.

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