Ireland's reknowned low business tax part of the problem

As Ireland looks to consider the tough terms of an international bail-out package, it's low business tax which has attracted around 1,000 multinational corporations, emerges as one of the chief reasons for its dire financial situation.  It's all good and well to attract business in order to stimulate jobs etc, but if the state doesn't change the terms on a gradual basis in order to earn enough revenue from their presence, then it becomes a long term loss leader - with awful consequences.

Have South African financial assets had their finest hour (decade)?

In highly regarded investment circles the belief is that the 8 year bull run which we've enjoyed in South Africa is about to end.  The theory is that we have benefitted from what is referred to as the democracy dividend and that, now that the euphoria has waned and reality is back, things will go back to normal.  Also, local p/e ratios are no longer as attractive as those offered overseas and nor are our dividends yields. But is it that simple?  Are the Western banking systems strong enough to survive?  Will the sovereign debts crisis sort itself out quicker than expected? 
With a huge interest rate differential in our favour and with the yields offered on our capital markets so favourable, and with no immediate change being evident, surely this influx of foreign money will cause a second round of pro-South African fervour.  Or will this be spoilt by mis-management of the economy, by rising unemployment, by nationalisation and low productivity, by the proposed NHI which is quite possibly going to cause our tax rates to sky-rocket, or even by the NCA which surely needs to be reviewed?  Which will it be?  Which way will it go?  Are we simply to experience a period of deceleration to be followed by another even greater surge of growth down the line if legislators keep policies sensible?  The bull run may be ending, but it may not be the last bull run that we'll see.

Voluntary Disclosure Programme - Amnesty No.2

The new tax and exchange control Voluntary Disclosure Programme for taxpayers who wish to disclose previously undisclosed unpaid taxes may do so from today, Monday the 8th of November. This tax and exchange control amnesty is different from the previous one in 2003 where only individuals were able to apply. Now trusts and companies may also come clean. However, another difference is that only penalties and interest will be waived in terms of the amnesty this time. All due outstanding taxes are to be paid in full. This time SARS and the SARB are involved separately and directly whereas last time a special Amnesty Unit was formed to process applications on their behalf. Anonymous enquiries may be made to either SARS or SARB in order to determine whether one qualifies in terms of the Tax or Exchange Control VDP or not (before making formal application).
The VDP lasts until October 2011. For a confidential discussion, you may e-mail vdp@groominvestmentconsulting.co.za

Emerging Markets may be near a short term top - Stay put if in for the long term

Emerging markets have been steaming ahead since the bottom last February. Have they shot their bolt? I think they may have if you have a shorter term view, inflation is approaching and quality stocks are generally trading at levels which are far less attractive than sim,ilar high quality stocks based in developed markets. This doesn't mean you should switch out of your EM funds if they are a managable portion of your portfolio. Just don't go in right now. Also, if you have a global equity holding, just trust your (quality) global equity manager select stocks which can benefit from revenues earned elsewhere for a while.

Exchange Controls for individuals are now virtually a thing of the past

South African residents are now able to send capital worth up to R4million per year for foreign investment purposes. This means that most of us will no longer need to worry about exchange control regulations. Even those families with joint assets exceeding R8million will be able to send everything out pretty swiftly after having left the country. And this without paying the excess levy of 10%.