Global bn’aire tax scheme would raise USD 250 bn annually -G20 report

What would it look like if global b’naires had to pay the taxman? A global scheme to tax the world’s 3k b’naires could raise up to USD 250 bn annually, according to a report (pdf) by French economist Gabriel Zucman, who maintains the scheme is feasible. Commissioned by Brazil, which currently holds the G20 presidency, the study highlights that the OECD’s recently introduced 15% global corporate tax attests to the potential success of imposing a global tax on wealthy individuals. Initially proposed by Brazil’s finance minister in February and endorsed by French Finance Minister Bruno Le Maire, the draft proposal will be on the table for discussion at the upcoming G20 finance ministers’ meeting in Rio de Janeiro next month.

The study proposes a minimum annual tax of 2% on individuals with a net worth exceeding USD 1 bn. That’s a departure from the current average tax rate among b’naires of 0.3%, albeit far below the global average income tax rate. Zucman recommends an additional levy to ensure b’naires contribute at least 2% of their wealth in taxes each year. The estimated tax revenue would be directed towards funding public services like education, healthcare, and climate change mitigation.

Not everyone is on board: Implementing a global tax could be impractical with the “two countries with the largest number of b’naires [being] the US and China. Neither will realistically implement this,” one tax policy pundit told the Financial Times, expressing skepticism about the practicality of the proposal. For the tax to be effective, the report stressed that it is essential for countries to establish enhanced cross-border information sharing mechanisms on affluent individuals, including improving the identification of beneficial ownership across various assets such as financial holdings, properties, companies, and other legal entities.

It’s not going to be easy, but it’s feasible — even with current global political turbulence, Zucman maintains. He points to the recent global corporate tax — which was met with fierce pushback and is yet to be ratified by the US Congress — as evidence of possible change, Bloomberg reports. However, for Brazil to garner support for the proposal after the end of its G20 presidency, it must demonstrate success with smaller reforms, as its “real challenge is to maintain visibility and momentum,” former chief broker for the global corporate tax agreement Pascal Saint-Amans told the news outlet.

MARKETS THIS MORNING-

All five major Asian benchmarks we follow are solidly in the red in early trading this morning. The ASX 200 (-1.3%) and the Nikkei (-1.1%) are leading the dip, followed by the Hang Seng, Kospi, and Shanghai Composite. The selldown comes as the JPY hit a 38-year low against the greenback, CNBC reports.

And if futures are any indicator, US and European markets are also looking at selling pressure when the opening bell sounds later today.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.6% yesterday on turnover of SAR 5.5 bn. The index is down 2.6% YTD.

In the green: Miahona (+8.9%), Rasan (+5.9%) and GIG (+5.4%).

In the red: Ades (-4.6%), SRMG (-3.5%) and Acwa Power (-3.3%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.3% yesterday on turnover of SAR 96.6 mn. The index is up 7.5% YTD.

In the green: SPC (+8.7%), Munawla (+8.6%) and Al Babtain Food (+7.3%).

In the red: Yaqeen (-19.4%), NGDC (-7.7%) and Neft Alsharq (-3.9%)

CORPORATE ACTIONS-

#1- Shareholders of Tadawul-listed Perfect Presentation (2P) approved the board’s recommendation to double its capital to SAR 300 mn, according to a regulatory filing (pdf). 2P will finance the increase by capitalizing SAR 150 mn from its retained earnings and granting one share for every owned share by shareholders. The capital increase aims to bolster the company’s capital base and future plans.

#2- Shareholders of Nomu-listed Academy of Learning approved the board’s recommendation to increase its capital by 50% to SAR 90 mn through, according to a disclosure to Tadawul. The capital increase comes under the company’s growth and expansion plans.

#3- Shareholders of Nomu-listed Pan Gulf Marketing (PGM) approved the board’s recommendation to raise the company’s capital by 50% to SAR 75 mn, according to a disclosure to Tadawul. The capital hike comes under PGM’s plans to support its capital base and future plans. PGM listed on the parallel market in February after taking a 12% stake to market.

#4- Shareholders of Tadawul-listed Gulf Ins. Group (GIG) have signed off the board’s recommendation to distribute SAR 78.8 mn in dividends at SAR 1.50 per share for FY 2023, according to a disclosure to Tadawul. The distribution date was set for Sunday, 30 June.

#5- Shareholders of Nomu-listed Sure Global Tech approved the board’s recommendation to distribute SAR 11.5 mn in dividends at SAR 1.50 per share for FY 2023, according to a regulatory filing (pdf). The distribution date is set to be announced at a later date.

#6- Shareholders of Nomu-listed View United Real Estate Development have approved the board’s recommendation to distribute SAR 9.9 mn in dividends for FY 2023, according to a regulatory filing (pdf).