Brazil and India hit businesses with highest sales and consumption taxes

High sales and consumption taxes in UK and Europe threaten consumer recovery
Lack of federal sales tax keeps US sales taxes low

Brazil and India hit consumers with the highest levels of consumption and sales taxes in the world, according to new research by UHY, the international accounting and consultancy network.

UHY adds that behind India and Brazil, European countries impose the heaviest sales tax burden, which threatens to undermine recoveries in consumer spending by putting pressure on disposable incomes.

UHY tax professionals studied data from 22 countries* across its international network, including all members of the G7 and the developing BRIC economies. UHY calculated the percentage of the total price of a representative basket of goods and services that was made up of taxes and duties.

The Brazilian and Indian governments take 28.7% and 38% respectively of the total price of the basket of goods and services through taxes. On average, European governments are responsible for 15.5% of the price of UHY’s basket of goods and services.

This compares to an average of 13.8% for all countries, an average of 8.1% in the Asia-Pacific countries, 12.1% in G7 countries.

Ladislav Hornan, chairman of UHY, says: “Brazil and India, like many developing economies, rely far more on sales taxes than income taxes compared to their more economically developed counterparts. Lower income taxes can have a positive effect on productivity, as it encourages individuals to work harder and entrepreneurs to generate more wealth.

“However, questions remain as to whether these high consumption taxes have hindered the growth of vibrant consumer element of those economies.”


How Do You Rank?

Imagine the sense of satisfaction and pride if your business had won an award at the recently held Westpac West Auckland Business Awards.

What does it take for a business to win such an award?

When someone asks you ‘how is your business doing?’ it can often be difficult to be objective.  Many business owners simply look at sales and net profit results and provided they are better than last year they take the view that things are ‘OK’.

This week I had discussions with two different clients.  The first client is in a sunset industry and their turnover this year is half that of last year. It is an industry wide phenomenon resulting from changes in technology.  They may not survive.

The second client, after completing comprehensive market testing, is successfully selling software to the world.

With the rapid pace of change it can’t be assumed that there will be time to adjust to market changes.  We all need to be ahead of the game.

In a fast moving environment regularly testing your business against best practice is, in my view, critical to sustained success.

The business award winners are all businesses that ranked the best when they were tested against the USA based system called the Baldridge Criteria for Performance Excellence.

We have been sponsoring the West Auckland Business Awards for 18 years and have taken a keen interest in the robustness of the judging process.

The Baldridge system for performance excellence is well regarded and comprehensive.  The framework covers the areas of:


Head in the Clouds

Callum Mills of Ideal Systems discusses the increasing influence of Cloud Computing

In just a few years the ‘cloud’ has transformed from being a techie buzzword to a legitimate tool that cuts cost, boosts productivity and eases capital expenditure.

Cloud computing refers to on-line services that you can access from any device that is connected to the internet.

At the most basic level, cloud computing can be utilised to store or backup files to a server on the internet.  These files are usually automatically stored on both your local system and in the cloud as soon as you close the document or application.  These files can then be accessed by you from any internet enabled device such as a laptop, desktop, tablet or smart phone.

With some systems you can allow other people, with whom you collaborate, access to all or some of your data.


Congratulations Learning Media Limited

          Learning Media Limited Dominates CLNZ Educational Awards Tim Livingstone is a director of Learning Media Ltd, who have achieved success in the Copyright Licensing New Zealand (CLNZ) Educational Publishing Awards held during November 2012. The Copyright Licensing New Zealand (CLNZ) Educational Publishing Awards were established three years ago to recognise…


The Year in Review – 2012 Tax Round Up

The 2012 year may not have brought about many profound changes to the tax system, compared  with 2011, but there has been the usual ‘tinkering around the edges’. Here is a summary of the changes we have seen in 2012, from Jim Martin, Head of Tax:

  • The removal of the under $9880 Tax Credit and the Child Care and Housekeeper Tax Credits.
  • Changes to the Child Tax Credit so that it will not be available on income that has been taxed at source, for example where PAYE or withholding tax has been deducted from a child’s earnings.  This change will mean only the first $2,340 of a child’s earnings will be tax free, provided they are not taxed at source.
  • In the 2012 Budget $78.4M was set aside to further improve tax audits and compliance activities.
  • Clarification of the interest deductibility rules for Look-through Companies (LTCs).
  • Clarification on which types of buildings may continue to be depreciated for tax purposes.
  • The motor vehicle mileage rate set by Inland Revenue was increased to 77c per kilometre.
  • The Charities Commission was disestablished and its functions and duties reassigned to a Board and the Chief Executive of the Department of Internal Affairs.

The Strange and Wonderful World of Tax

As has become custom for the final newsletter of the year we like to end on a lighter note so for this month only, Taxing Matters is replaced by The Strange and Wonderful World of Tax which takes a look at the entertaining side of tax.

India Taxes Working Elephants

Owners of working elephants in India that are used at temples, festivals, parties or other ceremonial occasions are now required to charge a 12.36% service tax when hiring out their elephants.

Lap Dances Not Tax Exempt

The New York state tax department and an appeals court disallowed a New York strip club an exemption from state taxes when the strip club claimed an exemption on the grounds that its nude lap dances were an art form. The state Tax Appeals Tribunal said the club didn’t provide sufficient evidence that it qualified for the exemption.

‘Nutella’ Tax Approved

In an effort to discourage the consumption of oil rich in saturated fats the French Senate approved an amendment that would quadruple the tax of palm oil. This has become known as the Nutella amendment as palm oil is a key ingredient of the spread.


UHY Staff News

Staff Additions UHY Haines Norton welcomes Trudi Diamond and Jane Chea to the firm; Trudi and Jane have both taken up positions in our audit team as audit juniors. Total Eclipse of the Sun On 14 November 2012 there was a solar eclipse, one of the best vantage points to witness the eclipse was northern…


Christmas Cheer

What kind of bird can write? A pen-guin! What do you get if you cross Santa with a detective? Santa Clues What happened when the snowwoman got angry at the snowman? She gave him the cold shoulder! What do you call a snowman in the summer? A puddle! Knock knock! Who’s there? Snow. Snow who?…


Mike Bristow

Congratulations to UHY Haines Norton client Mike Bristow who has recently been appointed by the property services company Darroch to the position of National Director of Valuations.  Mike specialises in commercial valuation and dispute resolution