Indian rupee sees worst day in 1-1/2 months

Updated 22 February 2013
0

Indian rupee sees worst day in 1-1/2 months

MUMBAI: The Indian rupee fell its most in one-and-a-half months as global risk aversion pushed local stocks sharply lower, with the currency awaiting cues from the federal budget next week.
Global risk assets were pummeled as world share markets fell and the dollar and safe-haven assets rose, a day after minutes of the Federal Reserve’s last policy meeting cast doubts over how much longer the US central bank would stick to its stimulus plan.
The sell-off was reflected in Indian markets as local shares fell their most in nearly seven months, raising concerns about whether there will be continued inflows into equities that have largely buoyed the rupee so far.
Volumes continued to be thin as there was little participation from state-run banks in the second day of a nationwide strike.
“The fall in the rupee on Thursday was a reflection of the stock market. However, I expect some bunched-up dollar inflows on Friday due to the ongoing strike,” said Sudarshan Bhat, chief foreign exchange dealer at Corporation Bank.
He expects the rupee to trade in a 54.25-54.75 range in the run-up to the federal budget.
The partially convertible rupee closed at 54.47/48 per dollar versus its previous close of 54.075/085. It fell 0.7 percent, its biggest daily fall since Jan. 4.
Dealers are looking forward to the federal budget to see whether Finance Minister P. Chidambaram will present a budget that will put fiscal discipline ahead of populist spending.
A budget favorable to rating agencies and foreign investors is likely to trigger a rally in equities and the rupee.
In the offshore non-deliverable forward PNDF, the one-month contract was at 54.82, while the three-month was at 55.48.
In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.55 with a total traded volume of $ 6.4 billion.


Jordanian cabinet approves new IMF-guided tax law to boost finances

Updated 21 May 2018
0

Jordanian cabinet approves new IMF-guided tax law to boost finances

AMMAN: Jordan’s cabinet on Monday approved major IMF-guided proposals that aim to double the income tax base, as a key part of reforms to boost the finances of a debt-burdened economy hit by regional conflict.
“When only 4 percent of Jordanians pay (personal) income tax, this may not be the right thing,” Finance Minister Omar Malhas said in remarks after the cabinet meeting, adding the goal was to push that to eight percent. The draft legislation was submitted to parliament.
The IMF’s three-year Extended Fund Facility program aims to generate more state revenue to gradually bring down public debt to 77 percent of GDP in 2021, from a record 95 percent.
A few months ago Jordan raised levies on hundreds of food and consumer items by unifying general sales tax (GST) to 16 percent — removing exemptions on many basic goods.
In January subsidies on bread were ended, doubling some prices in a country with rising unemployment and poverty among its eight million people.
The income tax move and the GST reforms will bring an estimated 840 million dinars ($1.2 billion) in extra annual tax revenue that will help reduce chronic budget shortfalls normally covered by foreign aid, officials say.
Corporate income tax on banks, financial institutions and insurance companies will be pushed to 40 percent from 30 percent. Taxes on Jordan’s phosphate and potash mining industry will be raised to 30 percent from 24.
The government argues the reforms will reduce social disparities by progressively taxing high earners while leaving low-paid public sector employees largely untouched.
“This is a fair tax law not an unfair one,” said Malhas, who shrugged off criticism the law is lenient on many businesses connected to politicians whose transactions are not subject to tax scrutiny.
Husam Abu Ali, the head of the Income and Sales Tax Department, said a proposed IMF-recommended Financial Crime Investigations Unit will stiffen penalties for tax evaders. Critics say it will not tackle pervasive corruption in state institutions.
Abu Ali said the government could be losing hundreds of millions of dollars through tax evasion, which is as high as 80 percent in some companies.
The amendments lower the income tax threshold and raise tax rates. Unions said the government was caving in to IMF demands and squeezing more from the same taxpayers.
“It is penalizing a group that has long paid what it owes the state,” the unions syndicate said in a statement.
“It imposes injustice on employees whose salaries have barely coped with price hikes rising madly in recent years.”