Mexico"s junk food taxes hitting Pepsi, Coke

NEW YORK, USA (AP) — No wonder Coke and Pepsi are spending millions of dollars to fight proposed taxes on sugary drinks in California.

PepsiCo reported a higher quarterly profit yesterday as global sales rose, but one weak spot was Mexico. The company said snacks sales volume declined by three per cent, hurt by a new tax on junk foods.

Recent declines suffered by Pepsi and Coke in Mexico underscore why the beverage industry is fighting tax proposals on sugary drinks in San Francisco and nearby Berkeley.

PepsiCo — which makes Frito-Lay chips, Gatorade and Tropicana — reported similar declines in its snacks business for the first half of the year, starting when the tax went into effect.

Coca-Cola, which is scheduled to report its third quarter results on October 21, has also reported beverage volume declines in Mexico for the first half of the year, citing a similar tax on drinks. Mexico has the world’s highest per capita consumption of Coca-Cola drinks.

Hugh Johnston, chief financial officer for PepsiCo, said in a phone interview that declines in Mexico were in line with what the company expected. To mitigate the impact of the tax, he said PepsiCo plans to target different package sizes for different outlets.

The taxes in Mexico add one peso, about seven cents, to the cost of a litre of sugary drinks, and five per cent of the price to foods with 275 calories or more per 100 grams.

It’s not yet clear whether the taxes’ impact on consumption will last, or how significant it will be over time. And while PepsiCo monitors such tax initiatives around the world, Johnston said he doesn’t expect them to become more common.

Back in the US, San Francisco and Berkeley are seeking to become the first cities to pass per-ounce taxes on sugary drinks in the upcoming November election. The measures are being closely watched because many say defeats in the Bay Area, which is known for its liberal politics, would be a major blow to advocates of such taxes as a way to improve nutrition. Similar measures in other US cities have failed.

Health advocates have pushed taxes as a tool to cut consumption of calorie-laden junk food, similar to tactics that have successfully been used against cigarettes. Makers of such products say they are being unfairly singled out.

During a conference call with analysts and investors, PepsiCo CEO Indra Nooyi addressed the measures in California and said she believed such “discriminatory taxes” are “wrong”.

“We will make our case and hope the voters are sensible enough to look at the right answer,” Nooyi said.

Since the start of this year, the American Beverage Association contributed US$7.7 million to defeat the proposal in San Francisco alone, according to a filing made this week.

That’s far more than the US$391,000 in contributions reported by supporters of the tax over the same time.

In the meantime, the beverage industry has touted its commitment to reducing the calories people consume from drinks by more aggressively marketing drinks with less sugar. The industry has also stressed the need to raise awareness about balancing the calories people consume with how much physical activity they get.

View the original article here

Mexico"s junk food taxes hitting Pepsi, Coke

Calls to tax cheat hotline identifies millions in unpaid taxes

The authorities have identified millions of  dollars in unpaid taxes following calls to the tax cheat toll-free hotline.
The hotline is operated by Tax Administration Jamaica (TAJ).
Based on reports from the public, TAJ raised assessment of  J$130 million for various tax types such as Income Tax, Education Tax and GCT for the 2013-2014 fiscal year.

They include under-reporting, failure to pay and file, unlawful collection of  GCT, false deduction as well as false or altered documents.
In response, TAJ has ramped up efforts to manage increased information received.

The tax cheat hotline provides an avenue through which persons may confidentially submit information about individuals or companies suspected of  not complying with tax laws.
This is one of  the strategies used to widen the tax net and stem persons cheating the tax system.    
Once the information is received through the hotline, it is recorded by an agent and forwarded to the Investigation Unit for follow-up.

View the original article here

Calls to tax cheat hotline identifies millions in unpaid taxes

Wayne Cadogan: Barbadians must speak out against unfair taxes

Wayne Cadogan

BRIDGETOWN, Barbados, Thursday July 3, 2014 - The recently implemented Municipal Solid Waste Tax will be a burden on most Barbadians since it will largely affect a part of the population; the middle class.

It is true that when a government needs additional money to effectively run a country they tend to increase taxes, but this would be done across the board so that everybody would be taxed and not just a few. We all know that Barbados is not a manufacturing society and depends heavily on fragile tourism and sugar industries to earn foreign exchange.

Since all countries implement new taxes from time to time, society expects that at some time their taxes will increase, but it is the manner in which it is done. In most countries, the government would go to the public with a referendum or sensitize them regarding their intended plans to raise money through increasing or implementing a new tax. In Barbados’ case, the current government did neither of the two. The strategy used by the government is one of a dictatorial or strong arm method of imposing this new tax, which would have created a negative backlash if it was introduced in most other countries.

Click here to receive free news bulletins via email from Caribbean360. (View sample)

In some countries the public would be openly voicing their opinion through picketing, petitions to the government or marching to show their disapproval, especially regarding the manner in which it was done. What has happened to democracy in Barbados in recent years? Barbadians need to stand up for their rights and stop grumbling for nine days and sweeping things under the carpet and speak out, demonstrate, picket, bombard the press and boycott when their rights are being infringed on.

If the government had come to the people and stated beforehand that they have to raise the taxes or implement a new tax, the public outcry or backlash would not be as great, since the majority of the public understands that from time to time that government would have to increase or raise new taxes. In this case, this tax is an unfair tax since Barbados does not have a Waste Treatment Plant and the general public already pays taxes for the collection of their garbage. Also, every occupied house has a well, a grease trap and in some cases a septic tank on its property which from time to time the occupant has to pay an independent contractor to draw off when it becomes over filled. I could understand if this tax was implemented for those on the South Coast directly connected to the sewerage system.

Since Barbados does not have a Solid waste plant in place and this was discussed and implemented in Parliament two years ago, why is it that the government is suddenly dropping this tax on the people? The government had plenty of time to sensitize the public regarding their plans to introduce this tax. Is it because the economy is so bad and that they are doing it as part of the reconstruction of the economy and to raise finances to help pay for its multitude of foreign debts that are either overdue or about to become due?

As this tax does not affect the entire society, I would like to know who is paying the taxes for those tenants who are living in government housing free of cost as well as the upscale government houses who use just as much or more garbage than the average household. What the government should have done was to introduce an across the board 0.1 % tax on every working individual salary so that everybody would be paying the tax. This would not have been too burdensome on the taxpayer and in cases where there are multiple workers in a household it means they would be paying more and it would balance back out evenly. If a person had to pay on a site value of $200.000.00 a 0.1 % tax, they would only have to pay $200.00 for the year by the number of people working in that household.

If it isn’t already, Barbados will become one of the most expensive places in the world to live because of its tax structure, which in turn will be a deterrent for returning nationals or others who might want to consider living here.

The Barbados government cannot continue to raise taxes as a quick fix every time they need to raise money to bail out the country for one reason or another. The government needs to find new ways of raising funds and one of the main ways especially if it wants to save a fragile tourism industry from going under is to have two or three casinos, which should have been done years ago. The government has to bite the bullet and seriously consider the casino option, since a small selected few already control a plethora of one-arm bandits from which the government receives no direct benefits other than from license fees. There are lots of other ways that the government can create jobs and in many cases save a lot of wasteful expenditure, however I will leave that to the technocrats and experts to figure out since they are the ones being paid huge salaries and fees to run the country ‘effectively’.

The opinions expressed in this commentary are solely those of Wayne Cadogan. Wayne Cadogan is a social writer on issues that affect the masses, a retired Civil Servant and former national athlete.

View the original article here

Wayne Cadogan: Barbadians must speak out against unfair taxes

Omnibus, other reforms to bring in $4b more taxes in new fiscal year

BY CAMILO THAME Business Co-ordinator thamec@jamaicaobserver.com

Friday, February 14, 2014    

THE Government plans to implement further tax reform — including the removal of most exemptions and all zero rated items for GCT — in the upcoming fiscal year, which begins April 1.

But an Inter-American Development Bank (IDB) study shows that the new omnibus legislation and other measures already put in place should conservatively bring in an additional US$38million ($3.9 billion) in tax revenue next fiscal year (FY2014/15).

The full impact of the reform measures is estimated to be US$125 million, but the multilateral lender projected that just 30 per cent would be realized in FY 2014/15, and that the benefits would gradually increase over the next few years until they are fully realized in 2016/17.

The bulk of the increased revenue from existing tax reform measures in the upcoming fiscal year is expected to come from corporate tax — US$11 million — followed by GCT, US$10.9million and changes to tax incentive laws, which is expected to claw back US$6.9 million from businesses next year alone.

IDB documents accompanying recently approved funding an US$80 million loan for fiscal structural programme for economic growth stated that broader tax reform will become effective at the start of FY2014/15.

“The tax reform should include legislation to modernise income tax, customs tariffs, and social security contributions, including the administration of the National Insurance Scheme (NIS),”said IDB documents, which add that tax and tariff exemptions in all major taxes, excepting for a limited number of specific goods and services, would be greatly reduced.

Changes to GCT include the removal of Government purchases from the GCT zero rate list and a broadening of the the tax base by limiting the zero rate to exports and reducing the number of exempted goods and services.

The IDB document also reiterated that an evaluation of the possibility of further broadening the GCT tax base by including petroleum products within the GCT taxable base is being done.

“Including petroleum products in the GCT requires adjustment of the SCT to ensure consumer prices of petroleum products and its derivatives do not change significantly,” said IDB documents.

On the other hand, depending on the improvements in revenue associated with these reforms, the Government will consider a phased reduction of the statutory rates of the main taxes.

“The Government is considering a prudent reduction in tax rates after FY 2014/15,” the document continued. “This reduction will be subject to improvements in revenue associated with the initial reforms implemented in FY 2013/14 and FY 2014/15.

The IDB study was prepared to estimate the financial benefits generated by the introduction of a set of fiscal reforms aimed at strengthening the country’s fiscal position as well as at achieving the sustainability of public financing and of economic growth.

View the original article here

Omnibus, other reforms to bring in $4b more taxes in new fiscal year

Carreras to get back over $330m in taxes from Gov"t

Now, Carreras exhales…

CIGARETTE distributor, Carreras Group is near to receiving almost 20 per cent of the over $1.7 billion owed to it from the Tax Administration of Jamaica (TAJ).The tax body has commenced the refund but dialogue continues for the payment timeline of the remainder, according to Carreras Managing Director Marcus Steele on Wednesday in response to shareholders.“Rest assured that the directors and management of Carreras are working tirelessly with Government to get this money back. We prefer you to look at this in the context of the economy,” he said in response to queries on the payment delay from vocal shareholder Orette Staple at the annual general meeting held at the Pegasus Hotel in Kingston. “If you look in the financials for the first-quarter you would have seen that the $1.7 billion is now reflected as $1.5 or $1.4 billion. So from the TAJ side, the business has been collecting through a negotiation done by our directors and managers.”The notes accompanying the first-quarter 2013 results state that during the quarter, TAJ commenced refunds to Cigarette Company of Jamaica (CCJ), a Carreras subsidiary (in voluntary liquidation), by issuing “offsets against the estimated tax liability of Carreras Limited in the aggregate amount of $337.5 million subject to final agreement with the TAJ and Ministry of Finance and Planning”.In other words, the first steps in the payment of the $1.73 billion plus interest owed has begun.“The process is slow and I understand the impatience from the shareholders,” he said. “As soon as we get that money back, the directors through the liquidators will have to make a decision when and how we distribute that amount.”In 2004, CCJ received assessments for income tax claimed by the tax authorities for the years 1997-2002 amounting to $5.68 billion, including penalty and interest.CCJ appealed the assessment and on March 13, 2012, after a volley of judgments and appeals in lower courts, the Privy Council handed down its decision dismissing the appeal of the TAJ with costs to CCJ.These costs have been taxed and recovered.“Recovery, however, remains outstanding in respect of the amount paid of $1.73 billion, based on a lower court judgment,” indicated its 2012 annual report.Investors want the tax distribution in order to fatten dividends which are threatened by a fall-off in the core business activity of distributing cigarettes, due to the recent ban on public smoking.Steele on Wednesday reiterated earlier comments that the ban hurt sales by 30 per cent. He however remains expectant of amendments to the ban on public smoking.Carreras made $485 million net income in the first-quarter 2013, which represented a 39 per cent decline year-on-year.“We are not against the regulations but we have to take into consideration the rights of both smokers and non-smokers.”Health Minister Dr Fenton Ferguson introduced a ban on public smoking effective July 15.The fines for smoking in public spaces was initially $50,000 with a jail term of three months for a first offence.In addition, owners of establishments could be held liable for smoking violations on their compound with fines up to $1 million.Subsequently, Ferguson announced that some of these edicts would be amended by this month.Steele said that Carreras’s closed-door lobby was successful in removing the requirement of warnings on every stick; amending the definition of public and enclosed space; creating allowances for private residences; and reducing fines, along with the introduction of non-criminal sanctions.Carreras, however, quietly wants additional amendments.“We did not get all our concerns because we also had a concern on the graphic displays on all packages,” he said.Cigarette distributor receiving almost 20 per cent of the over $1.7 billion owed to it from the Tax Administration of Jamaica.

View the original article here

Carreras to get back over $330m in taxes from Gov"t