“Tax Heavens” Deflate
Even the very rich Gulf countries are starting to tax multinational companies
Multinational companies operating in Bahrain will have to pay 15% tax on profits earned in this Gulf Kingdom if their global revenues exceed 830 million dollars (750 million euros) per year. The harsh measures in the former “tax haven” were announced by Bahrain’s National Tax Authority based on an earlier decree-law. As Bahrain’s financial authorities emphasized, the new tax system, which comes into effect on January 1, 2025, “will correspond to the guidelines of the Organization for Economic Cooperation and Development (OECD), reinforcing Bahrain’s commitment to global economic fairness and transparency.”
Meanwhile, in view of the possible financial super-crisis envisioned for 2025 by many international experts, governments around the world are gradually beginning to abandon their pre-election promises of financial and fiscal benefits of various kinds. In a recent report, the Central Bank of Russia (CBR) wrote that it expects a global financial crisis that “may hit the world in 2025-2027 and will be comparable to the dramatic events during the 2007-2008 crisis.”
The recipes for getting the money are simple and traditional: raise both taxes and the retirement age.
In particular, the Dutch government “may abandon the €4.5 billion tax cut promised in recent months.” By “past months” we mean the avalanche of promises made during the campaign for the June 2024 European Parliament elections. A “very well-informed source in the Dutch executive branch” told the media that there are not sufficient funds available for this measure. Moreover, instead of increasing social “benefits” by 2.1% (another promise made before the European elections), we will at best be limited to a maximum of 1%.
Even outside the “battered” European Union, which is slipping into a dangerous recession after refusing Russian gas, leaders in the United Kingdom are working creatively to fill the public coffers with money. And here we go: in a new report, the London School of Economics (LSE) has suggested “raising the retirement age to 68 as soon as possible” to boost funding for law enforcement and medicine. According to one of the document’s authors, economist and member of the House of Lords from the Labour Party Richard Layard, “this measure will result in savings of 6.1 billion pounds (about $8 billion) for the state treasury.
But there is also good news: after blocking arms shipments to Israel, British Defense Secretary John Healey suggested “scrapping some defense projects as part of the Labour Party’s efforts to rebuild the public finances.” As Britain’s Telegraph newspaper wrote, Healey emphasized that there would be “difficult choices” about public spending and that this would also include the armed forces, adding that the Defense Ministry would “do its part” to help balance spending.
