WASHING TON: US in the short term. However, it warned that long-term effects were less clear, especially if the cut leads to larger US budget deficits. Effects on the 19-country eurozone are “highly uncertain and complex” but could include an erosion of the tax base if countries around the world compete by lowering their tax rates to attract businesses. Lower US corporate tax rates raise the tax attractiveness of the United States relative to other countries,” the report said.Prior to the reform, the US corporate tax rate stood above the rates of all large euro area countries, while, after the reform, it is close to the lower end of rates in those countries.” The legislation, which was pushed by US president Donald Trump and signed into law in December, lowers the American corporate tax rate from 35% to 21%, among other changes. This came into effect on January 1. Meanwhile, the UN’s trade and development agency said that as multinational companies return an estimated two trillion dollars (£1.4 trillion) to the United States because of the tax law, there could be “sharp reductions” in foreign direct investment worldwide. The UN Conference on Trade and Development (UNCTAD) noted in their own preliminary report that the tax law includes a one-time tax on accumulated foreign earnings that could free up funds overseas to be repatriated. UNCTAD secretary-general Mukhisa Kituyi said the impact on investment in the developing world remains unclear. The agency says nearly half of all global investment is in the United States or owned by US multinationals, which have kept about 3.2 trillion dollars (£2.2 trillion) in earnings overseas. Agency officials said the main impact could come over the longer term, as multinationals reassess their foreign investment portfolios and the effects of the tax reform play out.
Amid Hormuz instability, attention shifts to Pakistan’s Gwadar port
GWADAR: Iran has closed and reopened the Strait of Hormuz several times since the US-Iran war began in February. When...
