News TAX POLICY
HONG KONG
UK tax policies and consultations
Hong Kong government clarifies tax policy
The government has published a policy paper “Tax policies and consultations (Spring 2021)” outlining a number of measures that are designed to enhance the stability and effectiveness of the UK tax system by outlining a future pathway for its tax administration and tax policy development. These measures shape the next steps in delivering the government’s ten year tax administration strategy, and will take forward policy development across a range of important tax
issues, including business rates and environmental taxes, as well as a range of simplification measures. Further details are available at gov.uk.
OECD
OECD reports to G7 on need to strengthen economic resilience against crises Creating an emergency Rapid Response Forum to ensure that global supplies of essential goods continue to flow during major international crises is one of a broad range of recommendations contained in a new OECD report to the G7 on building economic resilience. The report, “Fostering economic resilience in a world of open and integrated markets”, says that the devastating impacts of the global financial crisis and now the Covid-19 pandemic will continue to leave lasting scars on our economies and societies. With the risk of other systemic threats on the horizon – starting with climate change but also spanning security threats, including cyber-attacks – it is critical to learn the lessons of these and previous crises in order to tackle the vulnerabilities of our economic system, absorb shocks and engineer a swift rebound. Ensuring the resilience of global supply chains of essential goods is crucial, the report says. An emergency Rapid Response Forum would provide the G7 and other governments with a means of upstream policy co-ordination AIAWORLDWIDE.COM | ISSUE
and, particularly, consultation ahead of the imposition of any trade restrictions. Such an initiative could also prepare timely co-operation on logistics, transportation, procurement, planning and communication. Commissioned by the UK government, which is currently holding the G7 presidency, the OECD report underlines the need for governments to co-operate both with the private sector (through, for instance, supply chain stress tests and emergency planning) and with other countries to boost transparency, discipline export restrictions and adhere to international regulation and standards. The report says the Covid-19 crisis has caused a huge surge in demand for certain goods, notably in the health and information technology sectors but argues that global supply chains have been part of the solution. After shortages of masks and personal protective equipment, in particular at the beginning of the pandemic, the global production and trade of facemasks both later increased tenfold to meet demand.
The Hong Kong government has clarified its tax policy in response to media enquiries about an article in the Financial Times, published on 22 March, carrying an interview with the Chief Secretary. The government insists that it has maintained a high level of transparency in taxation policy with a low and simple tax regime and will continue to do so. The government stressed that Hong Kong’s economic success has been built on a thriving market economy and a small government underpinned by a simple, transparent and low tax regime. Businesses and individuals in Hong Kong enjoy one of the most competitive tax systems in the world. It pointed out that Hong Kong has always been a staunch supporter of international efforts to enhance tax transparency and combat tax evasion and money laundering. UK-EU NEGOTIATIONS
Technical negotiations concluded on UK–EU MoU Technical discussions on the text of the Memorandum of Understanding (MoU), which was agreed in a Joint Declaration on Financial Services Regulatory Cooperation alongside the Trade and Cooperation Agreement, have now been concluded. Formal steps need to be undertaken on both sides before the MoU can be signed but it is expected that this can be done expeditiously. The MoU, once signed, creates the framework for voluntary regulatory cooperation in financial services between the UK and the EU. The MoU will establish the Joint UK-EU Financial Regulatory Forum, which will serve as a platform to facilitate dialogue on financial services issues.
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