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Why UK’s network of ‘Treasure Island’ tax havens is in trouble | Crime News

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The United Kingdom’s exotic network of “Treasure Island” tax havens could be facing the biggest threat to its existence in half a century after the United States and its allies pledged to squeeze more tax out of large, profitable multinational companies.

The often distant islands of Britain’s former empire have served as the premier jurisdiction for everyone from cash-rich Chinese officials to Russian oligarchs to Western firms to hedge funds seeking lower taxes – or complete secrecy.

But a tax deal hashed out by Group of Seven (G7) finance ministers in a grand 19th-century mansion near Buckingham Palace is likely to hit the UK’s treasure islands hard after decades of dodging attempts by major economies to claw back revenue.

“This is a turning moment,” said Alex Cobham, chief executive of the Tax Justice Network, an advocacy group that campaigns against tax avoidance. “We’ll look back in five or 10 years and say: ‘Yes, that is when it shifted.’”

“There is a narrative shift – this active commitment to end the race to the bottom,” said Cobham, though he accepted that the specific details could still be poorly drafted and that politicians have for years promised to crack down.

The world loses out on $427bn a year due to corporate and personal tax evasion, according to Tax Justice Network estimates. About $245bn of that is lost to multinationals shifting profit into tax havens and the other $182bn is lost to wealthy individuals squirrelling away assets.

If the details of the G7 pledge become an enforceable reality, then global flows of hidden profits could be redirected in one of the most fundamental ways since the days when the British empire crumbled in the 20th century.

As Britain’s power collapsed, some of its possessions became self-governing territories that were not part of the United Kingdom but which came under British defence agreements and preserved strong links with London.

Some of these 14 British Overseas Territories – including Bermuda, the British Virgin Islands (BVI), the Cayman Islands, Gibraltar and Turks and Caicos Islands – started to live off a blend of beach tourism and exotic finance that activists say left both locals and distant taxpayers short-changed.

Rival networks

British tax havens are responsible for 29 percent of the $245bn in tax the world loses to corporations, according to Tax Justice Network, which ranks BVI, the Cayman Islands and Bermuda as the top three enablers of corporate tax abuse on the planet.

The finance ministries of the BVI, Cayman Islands and Bermuda did not immediately respond to requests for comment.

Those British islands worst hit by the looming rerouting of corporate profits face a reckoning that will undermine the business model they have lived off for decades and that could lead to high unemployment, said Cobham.

Essentially, two rival and intertwined tax haven networks developed: a British lattice and a more continental European-flavoured one which includes Ireland, Cyprus, Luxembourg, Malta the Netherlands and Switzerland.

The G7 tax deal will make corporate tax havens much less attractive as it gives countries the right to add a top-up tax on companies’ profits in countries with tax rates lower than the global minimum.

“The ones that have traditionally served the personal market – that is the palm tree market if you like – they are by and large going to get away with this,” said Richard Murphy, a chartered accountant and visiting professor in accounting at Sheffield University Management School.

“It is the large corporate locations like Luxembourg, like Ireland, like the Netherlands that are really going to be picking up the hit here,” he said.

Countries worst hit are expected to lobby hard to retain as many of their tax advantages as they can. Key accountancy definitions such as “profit” and “tax paid” are still to be defined, Murphy said.

While Murphy saw less impact on many traditional British tax havens, he said that ultimately the most significant aspect of the G7 communique was that it sent a signal to the corporate world: “clean up your act”.

He said that would be a special concern as many Western boards face shareholders who are pressuring for better environmental, social and corporate governance.

“For the business community, this is sending out a very large message of ‘steer clear of these places – you could be in trouble’ and indeed some of them will be in trouble,” he said.

“Tech is obviously going to be hit, but so is financial services in a big way,” Murphy said. “Banking and finance are all in the firing line for this, as are potentially some of the pharmaceutical companies.”



Source – www.aljazeera.com

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The scrappy Hong Kong tabloid that refused to bow to Beijing | Freedom of the Press News

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Hong Kong, China – The last edition of the Apple Daily, the small scrappy Hong Kong tabloid that emerged as a champion of democracy and outspoken critic of China, has rolled off the presses, four days after the newspaper celebrated its 26th anniversary.

The paper had been raided by police twice during the past 10 months on suspicion of violating the National Security Law that was imposed by Beijing almost a year ago. Since the first raid last August, founder Jimmy Lai, 73, has been in jail awaiting trial under the law.

Last week’s raid saw five top executives, including its chief editor, arrested for alleged security offences as 500 police officers swooped in on Apple’s headquarters, with another staffer – the head editorial writer – apprehended on Wednesday morning.

The final nail in the coffin, however, was Hong Kong authorities’ freeze on the bank accounts of the media group that owns the paper. The move made it impossible for the paper to pay its staff and vendors, even as readers snapped up copies to show their support.

The decision was based on “employee safety and manpower considerations”, Apple Daily said as it announced its closure on Wednesday.
“Here we say goodbye. Take care of yourselves.”

Staff members of Apple Daily and its publisher Next Digital clap out the final edition of a paper that began publishing in 1995 and became a thorn in Beijing’s side [Tyrone Siu/Reuters]

Hong Kong was returned to Chinese rule in 1997 under the “one country, two systems” framework meant to guarantee rights and liberties absent in the mainland. For most of the past 20 years, the territory has remained a bastion of press freedom in a country where media is muzzled.

“The demise of Apple Daily negates ‘one country, two systems’ and sets the stage for ‘one country, one system,’” said Willy Lam, a longtime commentator on Chinese politics and a veteran newspaper editor.

Bold, brash

Founded just two years before the handover, Apple Daily was at once a gamble and a leap of faith.

“The paper wanted to have some impact not just on Hong Kong but also to support the liberalisation of China,” Lam told Al Jazeera. “But as China has become less open to Western values, the paper has focused on defending Hong Kong values and holding Beijing to account.”

In its inaugural editorial, Apple Daily said it aimed to be a paper for the Hong Kong people.

Lai, its founder and funder, a devout Catholic who had made a fortune in the fashion business, named the paper after the forbidden fruit in the Garden of Eden in the Old Testament. Its rhyming couplet jingle – “An Apple a day, no liars can hold sway” – caught the attention of Hong Kong readers used to more staid offerings.

It was loud. It was bold, It was flashy.

The paper grabbed attention when it splashed a surreptitiously shot photo of Deng Xiaoping – China’s then-paramount leader died in February at the age of 92 – on his deathbed on the front page.

Brashness was its selling point.

Its reporters frequently skewered public officials and needled the comfortable.

“It speaks truth to power and finds a way to do profitably,” said Lokman Tsui, assistant professor of journalism at the Chinese University of Hong Kong.

Jimmy Lai, standing by one of the printing presses in 2009, created a hugely popular paper that supported democracy, was unafraid to speak truth to power and critical of the Communist Party in Beijing [File: Alex Hofford/EPA]
Apple Daily’s founder and funder, Jimmy Lai, was arrested in August under the national security law and the paper’s headquarters raided. He has now been jailed [File: Tyrone Siu/Reuters]

The paper catered to high brow and low. Colourful spreads of scantily-clad female models appeared in the same section of the paper as erudite columns featuring quotes in Latin and Classical Chinese. With a couple of exceptions, its ranks of columnists were the who’s who of the territory’s pro-democracy circle.

Giving people what they want

Launched at the dawn of the internet age, the daily was quick to adapt to the digital world. Its website pioneered animated news – a mix of stills, short clips and clever graphics with narration dripping with sour sarcasm. Its lifestyle channel on YouTube built a fervent following.

A decade in, the paper’s circulation peaked at 500,000 in a city of approximately six million people with a dozen dailies.

Apple Daily’s brand of advocacy journalism would soon make the paper a thorn in the side of the Chinese Communist Party. But to Lai, a rags-to-riches maverick millionaire now named Public Enemy No. 1 by Beijing, it was all about giving his customers what they would buy, even down to protest poster inserts.

In the summer of 2019, amid popular opposition to legislation that would send Hong Kong residents for trial in mainland China, the paper shorthanded “extradition to China” into the homophonic colloquial Cantonese expression of seeing someone to the grave. The expression immediately caught on and became a rallying cry in the protest movement.

“At times, we might have gone overboard but everything we did fell within the bounds of the law,” said Robert Chan, 45, who has covered mainland China for the paper for the past three years.

That is until the passage of the security law, which punishes what the authorities deem subversion, sedition, collusion with foreign forces and secession with possible life sentences.

Prosecutors have used Lai’s frequent meetings with US officials in recent years, from the then-vice president on down, as “evidence” of his alleged “collusion with foreign powers”.

Staff from Apple Daily and its publisher Next Digital work on the final edition of their newspaper on June 23. In its first-ever editorial, the paper said it wanted to be a publication of the Hong Kong people. It printed a million copies of its final edition [Tyrone Siu/Reuters]

Early last month, rumours started to circulate that Beijing wanted to see the paper be shuttered in time for the Communist Party’s centenary celebrations on July 1.

Technology reporter for a decade, Alex Tang, 37, said like most of his colleagues he had become conditioned to taking unsubstantiated gossip with a grain of salt – until the second raid and the company asset freeze.

During the past few days, some of the 800 reporters at the paper were frustrated by the lack of a definitive answer on the last publishing date and severance.

“Management said they’d hang on till the bitter end, and they’ve kept their word,” said Tang. “The company has done its best.”

Apple Daily will live on as a website on the self-governing island of Taiwan, where it ceased paper publication last month.

But in Hong Kong, China news reporter Chan said he will mourn the loss of far more than his livelihood.

“With the paper gone, so would the values it represents: pursuit of freedom and democracy,” he said.



Source – www.aljazeera.com

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‘Real and present danger’: Sydney imposes new COVID curbs | Coronavirus pandemic News

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Restrictions cover an estimated five million people after Delta variant-linked cases, as neighbouring New Zealand raises alert level.

People in Sydney, Australia’s biggest city, have been ordered not to leave the metropolitan area, as authorities scramble to contain a number of new coronavirus cases of the Delta variant – a development that has prompted neighbouring New Zealand to raise its alert level following possible exposure from a tourist from Australia.

New South Wales (NSW) State Premier Gladys Berejiklian announced the stricter curbs – affecting about five million people who live and work in the city – on Wednesday.

“Clearly this is an evolving situation,” Berejiklian said at a news conference.

The new rules took effect at 4pm Sydney time (06:00 GMT) and will remain in force for a week.

“Given what has occurred the NSW government will be taking action today to limit the spread of what is a very contagious variant of COVID.”

NSW health minister Brad Hazzard described the situation as “a very real and present danger” for the city as a cluster first identified in the beach surburb of Bondi grew to 21 cases with eight confirmed on Wednesday morning.

Most of the newly confirmed cases were traced to a single event, where a mass gathering was held on Tuesday.

“This is a new and more dangerous version of the virus,” Hazzard said during the news conference.

The new restrictions include a limit on household visitors to five people, including children, Berejiklian said.

Mask wearing, which had already been reinstated on Friday, will be extended with people required to wear masks in all indoor settings outside the home and at organised outdoor events. The measures also include capacity limits on public transport and in gym classes, while singing at indoor venues, including places of worship, will not be allowed.

Authorities are also urging people to come forward for testing.

“If we adhere to the health orders today, we will have a good chance on getting on top of this outbreak,” Berejiklian told reporters.

New Zealand on alert

 

As of Wednesday, Australia had recorded more than 30,300 cases and 910 deaths.

The country has been among the world’s most successful in containing the pandemic, allowing it to reopen its border to New Zealand.

But the new cases are testing the travel bubble between the neighbours.

On Wednesday, New Zealand raised its pandemic alert level in Wellington to level two, which is one level short of a lockdown.

Earlier, an Australian tourist who visited the capital city over the weekend tested positive for COVID when they returned to Sydney.

“These are precautionary measures which will remain in place while we contact trace and test all of those we need to,” New Zealand’s COVID response minister Chris Hipkins said.

Under the elevated alert level, offices, schools and businesses are still allowed to open, but people are required to follow social distancing rules.

Gatherings of more than 100 people are banned, including weddings and other parties.

New Zealand has a population of five million people, and has recorded a total of 2,720 cases and 26 deaths. The country has posted a 98.2 percent recovery rate.

In Australia itself, Queensland and Victoria have both closed their borders to people from many parts of Sydney as a result of the new cases.





Source – www.aljazeera.com

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River Nile dam: Egypt new African allies

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Recent years have seen a dramatic re-engagement with Africa, especially the Nile Basin countries.



Source – www.bbc.co.uk

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