Music Video: If You Could Read My Mind

Gordon Lightfoot

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Slump in Stamp Duty Drags Down Tax Revenue of Hong Kong

Wallis Wang wrote . . . . . . . . .

Government coffers felt a HK$18.3 billion drop in tax revenue last year – down 5 percent on the previous term – due mainly to a slump in stamp duty.

That was the word yesterday from Inland Revenue commissioner Tam Tai-pang, who said HK$360.2 billion was collected during the 2022-23 fiscal year.

His department collected HK$70 billion in stamp duty – 30 percent off the previous HK$99.7 billion – leading to a decline in overall tax revenue.

“Transactions in the property market were sluggish over the past year,” he said. “Both the transaction volume and prices were far from ideal, so revenue from stamp duty was unsatisfactory.

“The number of residential property sale agreements that required stamping [was] reduced by 24,000 while the number for transactions for other properties dropped by 7,000.”

But the department saw a 4 percent rise in profits tax and a 5 percent increase in salaries tax, collecting HK$174.2 billion and HK$79.5 billion respectively.

It expects HK$379.3 billion in tax revenue in the next term – 5 percent up – based on the city’s current economic performance.

Revenue from stamp duty should also increase by 21 percent to HK$85 billion.

And Tam said the department has been sending out millions of individual tax returns, including the largest batch of 2.4 million issued yesterday. But individual taxpayers are down to 2.73 million compared to 2.87 million the previous year and 2.97 million on the previous 12 months.

But Tam said that did not mean taxpayers are leaving Hong Kong.

“The decline in the number of tax returns was caused by various reasons,” he said. “For example, if some people do not have to pay tax [due to reductions] we won’t send forms to them every year.

“It doesn’t necessarily mean we receive less tax revenue or there are fewer taxpayers. It depends on the economic situation in the city and tax policies.”

He said 600,000 taxpayers received digital tax returns yesterday while 1.8 million will be receiving paper forms within one to two days.

Taxpayers must file returns by June 2 while sole proprietors of unincorporated businesses can file by August 2.

People submitting tax returns online are allowed a one-month extension.

Tam said the Legislative Council passed proposals from the budget including cuts in profits tax, salaries tax and tax under personal assessment with a ceiling of HK$6,000 per case.

Taxpayers can also claim a deduction for rent paid.

And in the fiscal year that started last month the child allowance was increased from HK$240,000 to HK$260,000 in the year of birth and from HK$120,000 to HK$130,000 in subsequent years.

Source : The Standard

European Central Bank Slows Pace of Rate Hikes But Vows More

David Mchugh wrote . . . . . . . . .

The European Central Bank slowed the pace of its interest rate increases Thursday, stepping back like the U.S. Federal Reserve from a string of jumbo hikes aimed at snuffing out inflation. But the ECB also said it was “not pausing” even as its efforts have worked by making mortgages and business loans harder to get.

The quarter-point hike came a day after the Fed approved the same increase but hinted it may be the last for now. The central bank for the 20 countries that use the euro currency started later and said it has further to go even as economic growth slows to a crawl and U.S. bank instability stirs new fears of financial turmoil.

“Based on the information we have today, we have more ground to cover, and we are not pausing. It’s extremely clear,” ECB President Christine Lagarde said at a news conference. She later added, “This is a journey. We have not arrived yet.”

Lagarde said there’s no “magic number” but that the bank “will know what that is when we get there.” Inflation has declined for several months, but at 7% is still far above the ECB’s goal of 2% considered best for the economy.

The previous streak of six hikes of half- or three-quarters of a point were being “transmitted forcefully” to lending practices, making it harder to borrow, the bank said. But how that is affecting the rest of the economy, namely by bringing down prices, isn’t yet clear.

The ECB’s lending survey this week showed that banks are getting stricter about giving loans and that consumers and companies are asking for less credit and fewer mortgages.

While the rate hikes are having an effect, “is it a sufficient effect yet? We don’t know,” Lagarde said.

Holger Schmieding, chief economist at Berenberg bank, foresees two more increases of a quarter-point.

“Unlike the US Fed, the ECB is almost certainly not done yet,” Schmieding said by email. “However, the fact that the ECB … slowed down the pace of hikes suggests that the peak is not far away.”

Making it more expensive to borrow can cool off spending, easing pressure on prices but potentially weighing on economic growth. Demand for housing loans in the eurozone plummeted in the first three months of the year, following the sharpest decline since statistics started in 2003 at the end of last year.

Inflation — which peaked at 10.6% in October — has been fueled by Russia’s invasion of Ukraine, which drove up oil prices and led Moscow to cut off most natural gas to Europe. Energy costs have since fallen, but the surge is still feeding through to higher prices for goods, services and food.

The spiking cost for Europeans to feed their families has become the new pain point because “the most vulnerable spend a lot more on food,” Lagarde said. Food prices jumped 13.6% in April from a year earlier, following a 15.5% annual increase the month before.

Lagarde said employees seeking raises and companies hiking prices to preserve profits were forces that could push up prices.

“We would hope that through a good social contract, these drivers of inflation do not activate each other in what I have called in other places a tit for tat,” she said.

Workers across Europe have been striking for wages that keep pace with inflation, with analysts saying average pay rises could hit 5% this year — driven by eye-catching deals like German public employees’ 11% salary increase over two years.

Lagarde, meanwhile, called renewed financial turmoil a risk to economic growth, though upheaval in the U.S. banking system appears — so far — not to be shaking the stability of Europe’s banks, the chief source of credit for businesses.

U.S. officials seized First Republic Bank this week and sold it to JPMorgan Chase, the third major bank failure following the collapse of Silicon Valley Bank and Signature Bank in March.

The earlier turmoil enveloped long-troubled Swiss lender Credit Suisse and led to a government-orchestrated takeover by rival UBS, but European financial officials say their banks have minimal direct exposure to the U.S. troubles.

The central bank has pressed ahead with rate hikes despite concerns about their impact on economic growth. The eurozone barely scraped out 0.1% growth in the first three months of the year compared with the previous quarter.

The ECB’s decision brings its benchmark rate on deposits from banks to 3.25%.

Source : AP

Chart: Cash-Loving or Cashless Society

Source : Statista

Taiwan Has ‘Real Time’ Five Eyes Links

Lu Yi-hsuan and Kayleigh Madjar wrote . . . . . . . . .

Taiwan maintains “real-time” intelligence sharing with the Five Eyes alliance of the US, the UK, Canada, Australia and New Zealand, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday.

Tsai made the remark during a legislative session in Taipei after a lawmaker asked if Taiwan had such exchanges with the group.

Chinese Nationalist Party (KMT) Legislator Charles Chen (陳以信) said he had discovered that the NSB had been upgrading its computer equipment last year and this year “to the level of those used by intelligence units in foreign countries.”

Chen asked Tsai if the upgrades could help Taiwan better connect to the Five Eyes.

The bureau had allocated funds to establish an “instant online reporting and communication mechanism” with foreign nations, Tsai said.

Chen asked if the upgrade would enable the bureau to share and receive intelligence from the Five Eyes alliance.

Tsai said that the NSB would do so via “a secure and encrypted system.”

Chen asked if the bureau was already sharing intelligence with the Five Eyes, to which Tsai said: “Yes, and in real time,” without elaborating.

Tsai reported to lawmakers what measures the bureau was taking to prepare for next year’s presidential and legislative elections, including its efforts to counter anticipated efforts by China to interfere in the vote.

Asked whether the NSB has a response to China’s attempts to expand its sphere of influence abroad, Tsai said that if a case arises that is strong enough to be prosecuted, it would be handled by the appropriate agency.

However, China’s tactics differ in Taiwan from other places such as the US and Europe, he added.

Beijing has allegedly established secret overseas “police stations” that US and other nations believe are tasked with collecting information on people who criticize the Chinese Communist Party.

Beijing denies the allegations.

Cases of Taiwanese being detained in China have also come to light recently, including reporters filming Chinese People’s Liberation Army exercises earlier this month and Gusa Press (八旗文化) editor-in-chief Li Yanhe (李延賀), also known ask Fucha (富察), who was detained in Shanghai last month.

Lawmakers also expressed concern that Beijing has stepped up its monitoring of and threats toward Chinese living in Taiwan.

Beijing would not dare set up one of its “police stations” in Taiwan, but it could work through third parties to monitor or manipulate Chinese and their partners, as well as Taiwanese with businesses in China, Democratic Progressive Party (DPP) Legislator Lo Chih-cheng (羅致政) said.

Tsai said there is no doubt that this is happening, but the bureau can only keep close watch for any contraventions of the law.

If any are found, it would transfer the case to prosecutors, he said, adding that there are some cases being investigated.

The bureau’s role is to collect and share intelligence with other agencies about potential Chinese interference, he said.

This is different from how China operates in other countries, where it can set up physical workstations or travel agencies, he added.

Source : Taipei Times