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New On The Network Today

This feed is published daily with selected new or updated content from across our network. For a list of network sites, many of which feature daily news, see below.

 
06/09 German Cabinet Agrees 'Future Package', Tax-News.com
03/09 South Africa Rejects Mining Tax, Tax-News.com
02/09 New Lowtax Editor Column, by Kitty Miv
01/09 International Privacy and Security, Investors Offshore special feature
31/08 Lowtax Belize, annual update
27/08 IRS To Drop UBS Lawsuit, Tax-News.com
26/08 New Lowtax Editor Column, by Kitty Miv
25/08 New PBTG Editor Column, Caroline, PBTG editor
24/08 Uruguay Stays On OECD Grey List, Tax-News.com
23/08 Don't Forget Doha, And I Don't Mean The Tennis, Jeremy Hetherington-Gore blog entry
20/08 Ireland Plans Social Security Overhaul, Tax-News.com
19/08 New Lowtax Editor Column, by Kitty Miv
18/08 New PBTG Editor Column, Caroline, PBTG editor
17/06 Lowtax Cayman Islands, annual update
16/08 Germany's Fiscal Court Seeks Property Tax Reform, Tax-News.com
13/08 Jurisdiction Special Focus: Antigua and Barbuda, Investors Offshore special feature
12/08 New Lowtax Editor Column, by Kitty Miv
11/08 New PBTG Editor Column, Caroline, PBTG editor
10/08 Brazil Cuts Import Tariffs, Tax-News.com
09/08 Ukraine Tax Code Published, Tax-News.com
06/08 France Plans Reform Of Property Tax Credit, Tax-News.com
04/08 New PBTG Editor Column, Caroline, PBTG editor
02/08 Islamic Finance - The New Mainstream Alternative, Investors Offshore special feature
28/07 New PBTG Editor Column, Caroline, PBTG editor
27/07 UK Launches Raft Of Tax Consultations, Tax-News.com
26/07 Fat Tax On The Menu , Jeremy Hetherington-Gore blog entry
23/07 Sarkozy Seeks 'Fiscal Convergence' With Germany, Tax-News.com
20/07 Singapore Base For Tuvalu OIFC, Tax-News.com
15/07 St Vincent & The Grenadines, Investors Offshore special feature
13/07 Tax- News.com Jersey Review 2010-2011
12/07 Goodbye To All That, Jeremy Hetherington-Gore blog entry
06/07 Hong Kong Full PBTG Guide, added to Personal Business Tax Guide
28/06 Lowtax Dubai, annual update
18/06 Singapore - Another Hong Kong?, Investors Offshore special feature
15/06 Swiss Parliament Approves UBS Agreement, Tax-News.com
08/06 Dubai Full PBTG Guide, added to Personal Business Tax Guide
04/06 Lowtax Panama, annual update
01/06 Lowtax Luxembourg, annual update
03/03 Personal Business Tax Guide, PBTG, has launched!
Providing essential tax news and information for globally mobile artists, contractors, entrepreneurs, professionals, small businesses, sportspersons and entertainers.
 

 
Lowtax Network Sites
Lowtax Network Portal: 'Low-tax' business and investment in the top 50 jurisdictions covered in exceptional detail.
Tax News: Global tax news, continuously updated through the day.
Investors Offshore: The independent offshore and alternative investment guide for expatriates and the globally aware investor. Sponsored by HSBC Bank International.
Law & Tax News: Daily news and background data on tax and legal developments for international business.
Offshore-e-com: A topical guide to offshore e-commerce focused on tax and regulation.
Lowtax Library: One of the web's largest and most authoritative business and investment information sources.
US Tax Network: The resource for free online US taxation information, covering: corporate tax, individual tax, international tax, expatriates, sales and e-commerce tax, investment tax.
NEW! Personal Business Tax Guide: Providing essential tax news and information on business for contractors, entrepreneurs, professionals, small businesses, artists, sportspersons and entertainers.
 
IMF Concludes Article IV Consultation With Cyprus

by Lorys Charalambous, Tax-News.com, Cyprus Thursday, August 20, 2009

On August 5, the Executive Board of the International Monetary Fund concluded its 2009 Article IV consultation with Cyprus.

According to the IMF report, the global crisis is beginning to affect Cyprus. The economy has been relatively shielded from the crisis so far, recording positive growth in the first quarter of 2009, well above the euro area. The financial sector has not required public capital injections. The IMF believes that the so-far relative resilience to the downturn is due to the elimination of exchange rate risk following euro adoption, conservative financial sector practices with limited exposure to toxic assets and strict supervision, and a domestic demand-based growth with less reliance on manufacturing exports. However, the economy is beginning to slow in response to the global crisis. Growth is projected to fall sharply to 0.5% in 2009 as banks and the private sector restructure balance sheets. On current policies, a tepid but uncertain recovery is expected to begin starting 2010.

With regard to fiscal policy, the IMF noted that Cyprus’s largely revenue-based fiscal consolidation has started unwinding. According to the IMF, this is due to softening growth, the lapse of temporary revenue-generating factors, and increases in untargeted social spending starting 2008. Recently enacted pension reforms were criticized within the report; the IMF warned that the reforms' reliance on contribution increases meant that they failed to address large ageing-related increases in pension expenditures. The IMF notes that fiscal policies could potentially become unsustainable if current policies, which significantly increase the inelastic component of budget spending (especially payroll), are implemented.

In its recommendations, the IMF Executive Board noted that Cyprus has weathered the crisis well. The overheating of the economy in 2007–08 has given rise to certain risks that would need to be managed carefully as the economy slows, the IMF added. The IMF endorsed the government’s objective to achieve a balanced budget over the medium term. It noted that, based on strengthened policies, the budget deficit will need to decline by about 0.5−0.75% of GDP a year with a significant upfront correction to avoid unfavourable debt-deficit dynamics going forward.

The Executive Board emphasized that fiscal adjustment should rely on reducing public consumption, particularly the wage bill, and on broader public administration reforms. The IMF noted that the temporary stimulus measures should be allowed to expire once the recovery sets in, and the social support measures should be carefully targeted to the needy. The IMF welcomed the passage of pension reforms. A few of the Executive Board Directors considered that additional pension reforms may be necessary in future, including raising the retirement age and better aligning public and private benefits.

The IMF has recommended the adoption of a medium-term budget framework and more effective management of public sector liabilities. The government’s recent initiative in this area could be further enhanced, the IMF advocates, by monitoring contingent liabilities and minimizing the possibility of moral hazard and adverse selection in public sector aid programs.

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