Personal Finance

Paying to Pay for Something


Credit card surcharging is in the news. Apparently, consumers are going to benefit by new surcharge limits that will be imposed on retailers. However, what is surcharging? In addition, why does it need limits? Moreover, is surcharging a good or a bad thing for customers?

What is a credit card surcharge?

When you buy something from a retailer, you usually have a choice of payment instruments. You can pay by cash, direct debit (EFTPOS), credit card, or sometimes more exotic options like BPAY or PayPal.

Finding the Middle Ground on Dividend Taxation


With tax reform back on the agenda, the future of dividend imputation remains uncertain.

Allowed in Australia since 1987, dividend imputation ensures companies and shareholders don’t end up paying tax on the same income, commonly known as “double taxation”. It means local company dividends come with a tax credit.

There is a perception among some that the early benefits of dividend imputation have been eroded due to the increasing globalisation of markets, and the dominance of international investors in determining share prices.

Australia's GST Methodology has its Supporters, but also Detractors


Recently, the Economic Society of Australia polled 49 prominent Australian economists on the issue of GST reform.

They asked each member of the panel whether they agreed with the following statement:

Increasing government revenue collected through the Goods and Services Tax (GST) by removing exemptions (such as food, health, and education) is better than achieving the same extra revenue by increasing the GST rate while retaining the existing exemptions.

The Australian Government Tackles Superannuation


The government has today accepted virtually all of the recommendations of the expert panel behind last year’s Financial System Inquiry. Clearly, we can argue about some, and people would prefer to pick and choose depending on their predilections, but rather than allow the reform process to be unpicked by stealth, the government has opted to support its experts. That is a welcome change.

The U.K. Government Crack Down on Tax Avoidance...Not So Much


Corporate tax policy says more about power than anything else does. Corporations seek to minimise the tax they pay – and, while governments ordinarily try to maximise their revenues, in the case of transnational corporations (TNCs) they understand that they have to tread carefully. Governments have come to accept that they hold fewer and fewer cards as capital has become more mobile.

Tax Havens are Safe from the OECD for Now


The news has been full of stories about how companies such as Amazon, Apple, Google, Microsoft, Starbucks and others are able to shift their profits to low or no-tax jurisdictions by using novel, legally permitted corporate structures and complex internal transactions (known as transfer pricing schemes). Companies are able to do so because they pay taxes at the place of their residence rather than where the underlying economic activity takes place.

The Tobin Tax would Work, in Theory


Tax the rich and give money to the poor – that is the basis of fiscal policy put forward by the UK Labour Party’s new shadow chancellor, John McDonnell. As well as forcing large corporations to pay their “fair share,” they resurrected the idea of the Robin Hood – or Tobin – tax. However, what actually is it and how would it work?

Commercial Bank Reform would help SMEs and ASEAN


Concerns about moderating economic growth and rising income inequality in ASEAN economies have brought small and medium-sized enterprises (SMEs) into the policy limelight. Arguing that SMEs have significant potential for creating jobs, some commentators are suggesting a host of industrial policies such as financial subsidies and local content rules to promote SMEs. However, this risks heavy-handed state intervention in SMEs. One possible alternative is to reform access to finance for SMEs — particularly from commercial banks — in ASEAN economies.

Discretionary Trusts and the Smell Test


The public knows something is “not right” with the tax treatment of family trusts (discretionary trusts). Accountants and tax lawyers working with discretionary trusts know firsthand that the income tax treatment has trouble passing the “smell test”. That is something even the most aggressive tax minimisers would concede.

Yet, the tax treatment of discretionary trusts has had little attention in government tax reviews. The 2010 Henry Review did not consider the appropriateness of the tax treatment of discretionary trusts - this was a shortcoming.

Do You Have the Right Personality for a Loan?


Lending money is a risky business. Since 2010, Bank of England figures reveal that lenders have written off an average of £13.2 billion a year in bad loans. You can never be 100% sure that you will ever get your money back.  One way of mitigating that risk is to know as much as possible about the person to which you are lending. Indeed, some financial managers reportedly are now considering the use of personality tests to assess the suitability of borrowers seeking loans or credit agreements.