Alex Stitt’s Post

The approval of key tax components in Chile's Fiscal Pact will ensure stable government spending in 2025. Commodity prices and the unemployment rate are signposts to monitor, as they could exert downward pressure on government revenue in 2025. Business implications: 👉 While fiscal uncertainties will remain somewhat elevated, MNCs should expect low operational disruptions in 2025 compared to previous years. Neither the current administration nor the anticipated market-friendly government will likely pursue increases in corporate taxes or income taxes for workers, ensuring some tax predictability in the short term. 👉 As sectors like security, pensions, and public housing remain government priorities, MNCs are encouraged to diversify their product and service offerings to cater to these growing sectors. For example, MNCs should provide e-government platforms for managing social programs and mobile applications that enable citizens to access benefits. Additionally, they should offer cost-effective solutions to help companies comply with the anticipated deregulation measures. Read our full view to find out more about government priorities in Chile 👇 And then sign up to The Lens, our weekly newsletter covering high-impact trends and developments for business professionals: https://lnkd.in/e85Rp85G #Chile #Chilefiscalpact #ChileMNCs #marketprioritization #investmentstrategies #planning2025

☝ NZ’s tax as a percentage of GDP is 33% (close to OECD average of 34%) ✌ We have the fourth highest company income tax rate in the OECD. 👌 Australia's avg superannuation contribution rate is 11.5% - ours is 6% Did you know that by 2050, 100% of NZ's current tax take will need to be spent on superannuation and healthcare alone? Our aging population and trouble maintaining a young, taxpaying workforce is an aspect of the economy that needs to be discussed. How does New Zealand plan on maintaining first-world living standards and sustaining its reputation as a great place to live? Take a read of my latest opinion piece below - and share your thoughts on NZ's tax future in the comments. Katherine Rich Phil Love Major Companies Group BusinessNZ Business Canterbury Business Central NZ EMA

By 2050 most people will have a substantial Kiwisaver account by age 65. Some people may need government assistance. This can effectively mean that the Pension as we know it could be scaled back considerably. The problem can be using an asset test because that encourages people to spend or hide their assets and then receive the public pension. There are some ways around this however. If a persons taxable income from age 30-60 is totalled up and is more than a certain amount then that could be the test rather than assets alone. If a person earns a total of more than $10 million over a 25 year period between 30-60 years old then that could disqualify them from receiving a public pension. In this scenario the capital gains that people make from selling assets could be recorded and calculated but not taxed. So there need not be a Capital Gains Tax. Your tax is that you do not get a pension if your income + capital gains over a 25 year period exceed $10 million. This seems like a high amount but it needs to account for inflation and it could not be implemented immediately so the earliest that such a mechanism could be put in place is 5-10 years in the future.

“Research from Oxfam published this year found that the boom in asset prices during and after the Covid pandemic meant billionaires were $3.3tn – or 34% – wealthier at the end of 2023 than they were in 2020. Meanwhile, a study from the World Bank showed that the pandemic had brought #poverty reduction to a halt. (...) Of course, the argument that #billionaires can easily shift their fortunes to low-tax jurisdictions and thus avoid the levy is a strong one. And this is why such a tax reform belongs on the agenda of the #G20. International cooperation and global agreements are key to making such tax effective. What the international community managed to do with the global minimum tax on multinational companies, it can do with billionaires,” the ministers say. https://lnkd.in/eVK6bjzf

#10Rules of successful nations: 4. Government  How big are the governments in the successful nations? There are some rules of thumbs. For example when the government deficits surpass 3 percent of GDP, it generally means that the government is too big. Another general rule is that successful governments tend to be small, providing enough space for free enterprise to work and flourish. According to “10 rules of successful nations”  the governments should have right-sized governments, not too big nor too small for their specific growth phase. Some governments are too lean, that increasing taxes and government spending is a step forward for them. In the league of developed countries, France has the biggest government by a large margin. Over 56 percent of the country's GDP is spent by the French government. This is much more than the average rate in developed countries. Even Georges Calemenceau, the former president of France, has described it as “A very fertile country, you plant bureaucrats and taxes grow!” For France, cutting down the taxes is a step forward. However, cutting taxes is not an easy practice as there are many beneficiaries for the current government spending, and they would definitely lobby against tax cuts. On the other side of the spectrum, there are governments that are weak that they cannot efficiently provide basic public goods that are sought to be provided by the governments. These public goods include basic transportation infrastructure and mechanisms to contain monopolies and even crimes. For example a country like Pakistan with 180 million population has only four million registered taxpayers and fewer than one million people actually file taxes annually. For these countries raising taxes is a step forward. These are countries that usually more than 30 percent of the economy is in the black market. People avoid bank accounts to escape taxes. They cannot save money and the employers also get  poor quality and unskilled workers. Many South Asian countries who experienced fast growth in the last decades still have relatively small governments, of course their governments are big enough to provide needed public goods, but not so big to impede free enterprise. Even today, a typical East Asian government spends only 20 percent of the country's gross domestic product.  Taiwan and South Korea started an inclusive welfare system just after the 1998 crisis and by then their per capita income was more than $15,000. Today the South Korean welfare system spends only 7 percent of the GDP, much lower than the developed countries. Source: “10 rules of successful nations” Photo Credit: Investopedia https://lnkd.in/dj-VvhSV

📈 As we navigate the global economic landscape, it's crucial to understand the relationship between tax revenue and GDP. This ratio measures a country's tax income relative to its economy size and can offer valuable insights into government revenue streams and taxation burdens. Recently, I came across an interesting chart ranking major economies by their tax-to-GDP ratios. Here are some key findings: - European countries 🇫🇷🇮🇹🇩🇪 lead with the highest ratios, indicating robust government revenues. - High-income countries generally have higher ratios, with India 🇮🇳 and Indonesia 🇮🇩 being notable exceptions. - China 🇨🇳 is a prime example of rising tax revenues preceding significant per capita GDP growth. This data underscores the importance of a balanced approach in fiscal policy - one that promotes economic growth while ensuring social welfare. #GDP #TaxRevenue #EconomicInsights

TAX THE RICH, say a majority of adults across 17 G20 countries 💰 🤑 💵 🏦 “Support for wealth taxes is notably high in Indonesia (86 percent), Turkey (78 percent), the United Kingdom (77 percent), and India (74 percent). Even in countries with the lowest support, such as Saudi Arabia and Argentina, more than half of the respondents are in favor (54 percent).” according to survey conducted by Ipsos and commissioned by Earth4All and the Global Commons Alliance (https://lnkd.in/db8KUYAv) Contact me about #assetsprotection #wealthprotection #familywealthsecurity

The IMF has released a report on the New Zealand economy overnight with some interesting comments on tax. It made clear it believed it was important to make sure tax relief expected in the Budget was fully offset by spending cuts, to avoid any upside pressure on inflation (which I would hope is uncontroversial). The IMF again called for New Zealand to introduce a comprehensive tax on capital gains, and interestingly a land tax, something suggested by the tax working group in 2010. In the view of the IMF, tax policy reforms were needed to promote investment and productivity growth and bring in additional revenue. It's an interesting read, albeit brief. I'm not sure how saleable it would be to the electorate but given it is the IMF, worth a look. #nztax #imf #taxbase #companytax #landtax #capitalgainstax said.https://https://lnkd.in/gVvGDGBD

The tax-to-GDP ratio is a key indicator that helps gauge a country’s economic strength and its capacity to generate revenues for public spending on things like services, infrastructure, and social programs. 📊 Nations with higher tax-to-GDP ratios typically enjoy stronger government revenues, which allow for greater investment in healthcare, education, and infrastructure. On the flip side, lower ratios often highlight challenges in tax collection, which can limit the government's ability to provide essential services. Here’s what the latest numbers reveal: 🔹 France leads with a notable 46%, reflecting strong tax collection and spending power. 🇫🇷 🔹 Italy and Germany aren't far behind, posting 43% and 39%, respectively. 🇮🇹🇩🇪 🔹 Countries like the UK, Canada, Brazil, and Japan hold steady at around 33-34%, striking a balanced approach. 🔹 The U.S. (28%) and Argentina (30%) sit in the middle, suggesting moderate tax collection. 🇺🇸🇦🇷 🔹 Russia (23%) and China (20%) show lower ratios, pointing to potential areas for tax policy improvement. 🇷🇺🇨🇳 🔹 On the lower end, India and Indonesia (12%) have room to advance their fiscal strategies. 🇮🇳🇮🇩 🔹 Saudi Arabia is an outlier with just an 8% ratio, which makes sense given its dependence on oil revenues instead of traditional taxes. 🇸🇦 💡 So, what does this mean? A higher tax-to-GDP ratio doesn’t automatically signal prosperity, but it does demonstrate a government’s ability to reinvest in the country through effective taxation. Nations with lower ratios might want to consider refining their tax systems to better support long-term development and growth. 🚀 What’s your take on this? Should countries with lower ratios overhaul their tax systems, or could there be other ways to unlock their economic potential? Share your thoughts below! 👇 #TaxRevenue #GDP #EconomicGrowth #TaxReform #GlobalEconomy #PublicFinance #EconomicPolicy #GovernmentSpending #FiscalPolicy #BusinessInsights #Leadership #GrowthMindset

Key issues for #UnemploymentBenefits in #DevelopingCountries: the level of benefits and the taxes used to finance them - according to David Robalino at The World Bank: 'Designing unemployment benefits in developing countries: For unemployment benefit programs, the key policy issues are the level of benefits and subsidies and the types of taxes used to finance them'. Elevator pitch In reforming unemployment benefit systems, the policy debate should be on the appropriate level of benefits, the subsidies needed for people who cannot contribute enough, and how to finance the subsidies, rather than on whether unemployment insurance or individual unemployment savings accounts are better. Unemployment insurance finances subsidies through implicit taxes on savings, while individual savings accounts with solidarity funds finance subsidies through payroll taxes. Taxes on certain consumption goods and real estate could be considered as well and could be less distortionary. Full-text: https://lnkd.in/dwMRWuH