UPH Business Centre for Law Studies

UK Economic Growth Improves

Written by: Bryna Budiman

According to the Confederation of British Industry (CBI), they estimated that UK’s economy grew by 0.7% in the three months to March, from 0.6% in the previous quarter. CBI’s monthly survey consists of 764 private firms from different sectors, the problem they were facing was ongoing Eurozone and Greece’s bailout, in addition the businesses in UK have to be ready to handle the strong pound, where the currency have been pulling down on weak export growth. The survey reads of 18% for the three months to March on the private sector growth indicator, where it shows that performance of businesses was improving. The survey shows that business and consumer services, along with manufacturing sector will strengthen in the near future. CBI’s deputy director general Katja Hall commented lower oil prices now which are felt by consumers, where cheaper petrol causes people’s household income and spending power to increase, and lowering costs for businesses.

Source: http://www.bbc.com/news/uk-politics-32199958

Taxes Hit Hard on Alibaba

Written by: Bryna Budiman

When there is IPO, companies have option to “lock-up” shares from trading for the purpose of preventing major shareholders from flooding the market in the start of a trading period. In Alibaba, two of the company’s “lock-up” agreements has ended, releasing a huge amount of 437 million for trading, where in addition to that, another 1.6 billion shares owned by Jack Ma and Joe Tsai and investors Yahoo and Softbank will hit the market in September.  To add, Alibaba has sold 320 million shares (13% of the company) in its IPO. All of these amount to a representation of 80% of their company, if sold Alibaba would get $165 billion. Due to this huge amount, China tax specialist, partner at Zhong Lun, Clifford Ng said, the more successful the company, the more reason for the government to collect taxes from them.  The taxation in China is concentrated on worldwide income, where it applies progressive tax rate on employment-based income which ranges from 3% to 45% and a capital gains tax with maximum of 20%. IN the past, authorities have failed to collect taxes from rich Chinese who use creative ways to launder money abroad. Now, Beijing is working hard on solving tax evasion as government debt becomes more evident. The government now requires big firms like Alibaba to register with State Administration of Foreign Exchange (SAFE), to control how much money flows in and out of China. In response to this, Alibaba spokesman Bob Christie replied that they will comply. Governments required companies to register with SAFE because now Chinese companies are listed overseas.

Source: http://money.cnn.com/2015/04/07/news/economy/china-alibaba-tax/index.html?iid=SF_BN_River

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