staronteam.com

Sunday, October 22, 2006

With online gaming in persistent worlds becoming more prevalent, a US congressional committee has begun to look into the tax implications of these booming online economies. Games such as World of Warcraft and Second Life have large player driven economic systems in which – either following the rules or against them – real world currencies are exchanged for in-game currencies. With the GDP of some of these economies rivaling that of some small countries, the US government is wondering if it is missing out on a potential source of tax revenue: or as some gamers might put it, the IRS is asking “You buy gold?”.

In cases where exchange of a real world currency for in-game currency is permitted by the rules of the game, some of these online games such as Second Life require that players report any income generated by these means to his or her government. In most on-line games however, a black market exists where players buy and sell in-game currencies in direct violation of the game’s rules; situations involving black markets are notoriously hard to tax.

Compounding the issue of currency exchange is the existence of in-game assets. In the real world if someone wins a luxury vehicle, he or she is expected to pay a capital gains tax on his or her winnings. If a 40 person “raid” in World of Warcraft gets a rare “drop,” worth up to thousands of dollars if sold illegally, should they be required to pay a capital gains tax?

Even if the issue of capital gains is ignored, there is still the matter of sales tax. In many of these games, non-player characters and players alike sell items to one another. If sales tax is to be applied, at what rate should it be charged and to what State does it go? Questions such as these have just recently been answered in much less hazy situations such as online versions of brick and mortar establishments.

Dan Miller, senior economist for the Joint Economic Committee had this to say on the issue, “I found that talking about this issue with some of the other economists on the committee, they are not really familiar with what a virtual economy is. The idea of Second Life or World of Warcraft or some of these other synthetic universes, they have trouble wrapping their head around it. So there’s an educational hurdle to overcome here.”

The preliminary findings of the committee state that virtual economies deserve clarification of existing tax laws, not new taxes.

Monday, September 4, 2006

India’s former External Affairs Minister Natwar Singh has, for the first time, been directly accused by the Enforcement Directorate (ED) for his involvement in the Iraq oil scam. The ED, which is responsible for enforcing foreign exchange control laws, has alleged that Singh, along with his son Jagat Singh and three others, acquired foreign exchange worth $8.9 lakh illegally. The 18-page show-cause notice issued by the ED says the money was acquired by the accused, in violation of U.N regulations, in exchange for two oil contracts awarded to Iraq’s State Oil Marketing Organisation (SOMO).

Of the $8,90,000, $7,48,550 was allegedly transferred by them to an account in the Jordan National Bank, the remaining $1,46,247.23, which was the commission for the oil-contracts, was deposited with Barclays Bank, in the Channel Islands. The money was transferred to an account in the name of Indus Trading Company, which itself is owned by Andaleeb Sehgal, a friend of Mr. Singh.

The accused are required to respond to the show-cause notice (issued on the 2nd of September), which Natwar says is an attempt by the ED to “defame” him, within 30 days. The independent Pathak Commission’s report had stated that there was “no material evidence to show that Natwar Singh derived any financial or other personal benefits from the contracts.”

Monday, September 7, 2015

The US economy added 173,000 jobs in August, the Bureau of Labor Statistics reported on Friday. The unemployment rate fell from 5.3 to 5.1 percent, the lowest since April 2008.

Although August job gains were lower than most economists forecast, job growth numbers for June and July were revised upwards by a combined 44,000. Average job gains over the past three months stand at 221,000, compared to March-May’s 189,000 monthly average. Over the past twelve months, job growth has averaged 247,000 per month.

Average hourly earnings rose 0.3 percent, or 8 cents, marking the largest increase in earnings in seven months. Hourly earnings had risen by 6 cents in July. Wages have risen by 2.2 percent over the past year.

Job growth in August was primarily concentrated in the health care and social assistance, financial activities, and professional and business services sectors. Those three areas of the economy added a combined 108,000 jobs. Food service and drinking places employment increased by 26,000 over the month, and other economic sectors saw employment hold steady. Manufacturing, on the other hand, saw employment decline by 17,000 in August. A stronger dollar and worldwide economic weakness make US exports less desirable, leading to a flattening in manufacturing employment so far this year after steadily rising in the early years of the US economic recovery.

The solid overall job gains led analysts to slightly raise expectations for a decision by the Federal Reserve to raise interest rates this month. Investors raised the likelihood of a September rate increase from 26 percent before the jobs report to 30 percent, and stocks dropped by over one percent on Friday. “The payrolls data is certainly good enough to allow for a Fed rate hike in September,” said Deutsche Bank’s head of currency strategy, Alan Ruskin. “The big question is still whether financial market volatility will scupper the plans.”

“This is the first time the market has looked at a Fed meeting and really has no idea what the Fed is going to do,” said Mark Kepner, a New Jersey equity trader with Themis Trading. “Right now you’re looking at the overall uncertainty and that’s what’s hanging on the market. I don’t think this number in and of itself changes how somebody’s going to vote.”

Tuesday, June 14, 2005File:JacobZuma.jpg

Today at about 1600 UTC/GMT, South African President Thabo Mbeki announced in a special session of parliament that he has taken action he feels is necessary, that is to “release [his deputy president], Jacob Zuma, from his responsibilities as deputy president of the republic and member of the cabinet”.

Zuma was implicated in corruption arising from his relationship with his former financial adviser, Schabir Shaik, who was convicted of corruption and fraud earlier this month. Shaik was found guilty by Durban High Court of two counts of corruption and one of fraud and was sentenced to 15 years imprisonment.

The President has called this one of his toughest decisions. Opposition leader of the Democratic Alliance immediately praised the president for holding “principle over politics”, and, while deeply saddened, former president Nelson Mandela supported Mbeki’s decision. Jacob Zuma was the favourite of the ruling African National Congress party to succeed Thabo Mbeki as president.

Following this ordeal, the government of South Africa has reaffirmed its dedication to the reduction and eventual elimination of corruption in all areas of politics.

UPDATE (July 7)

The African National Congress held a meeting of it’s National General Council over the weekend of 2-3 July. Zuma attracted a lot of favourable attention, mostly from people who wished to defeat policy initiatives that included relaxing some of the legal constraints on employers. He was reinstated as ANC deputy president and, in a first for the party, granted a salary (details not revealed). It now appears that Jacob Zuma’s political future is closely tied to that of the “left wing” of the ANC.

Tuesday, May 1, 2007

The final round of the ELSA Moot Court Competition on WTO Law is taking place in Geneva this week. Eighteen teams from Europe, North America, Latin America and Asia-Pacific have made it to the finals to contest one of the key issues underpinning WTO trade negotiations – commitment to public health.

The 2001 WTO Doha Declaration on TRIPS and Public Health was a vital step in increasing access to medicines in health emergencies. It permits governments to temporarily set aside patents on specific medicines to protect the health of their people.

Many of the key arguments of the WTO negotiations on this matter as well as the issues surrounding free trade agreements (FTAs) between WTO members will be used by the students as they debate the issues at hand. Students will play out a dispute between two WTO members – one setting aside a pharmaceutical patent, the other challenging this on behalf of its industry – in front of a distinguished panel of judges, including many WTO luminaries.

Giorgio Sacerdoti, Chairman, WTO Appellate Body, said: “The WTO dispute settlement system fulfills at least two important systemic functions in today world society: (1) “ensure the respect of treaty based rights and obligations in a multilateral setting by providing the speedy resolution of disputes in an impartial way, based on the rule of law”, (2) “by collective monitoring ensure implementation of those decisions”. Lawyers are called to play an increasing role in this mechanism. ELSA has to be commended for preparing students to this challenge and opportunity on a worldwide basis.”

Friday, July 17, 2009

The European Union (EU) has allowed four Indonesian airlines back into their airspace. A blanket ban had been placed on Indonesian air carriers in 2007. The EU has now added every Zambian airline and all but one from Kazakhstan to their blacklist.

The four airlines allowed to fly into Europe are state-owned flag carrier Garuda Indonesia, privately owned scheduled carrier Mandala Airlines and two private chartered airlines dealing mainly with western clients, Airfast Indonesia and Premiair.

The decision to place the nation’s fleet on the list of air carriers banned in the European Union followed a string of accidents, as well as a safety audit by the International Civil Aviation Organisation (ICAO). The accidents included the Adam Air Flight 574 disaster, where an airliner vanished from radar and crashed, Adam Air Flight 172, a nonfatal accident in which a plane cracked in half after landing and Garuda Indonesia Flight 200, a runway overrun that killed 21.

The ICAO had issued 600 safety recommendations to Indonesia. According to foreign minister Hassan Wirajuda, there are 69 requirements issued to the airlines by the EU, of which 62 have been met. Indonesia has also made improvements to its safety infrastructure, introducing better inspections. Earlier this year, five airlines had their operating certificates revoked for failing inspections.

The EU said the decision was made as a result of “significant improvements and accomplishments of the Indonesian civil aviation authority” which “are recognised in the area of safety.” Garuda plans to launch services to Europe next year.

The EU list now also contains all Zambian airlines and every airline from Kazakhstan except Air Astana. Astana has had restrictions put upon its flights to Europe.

European Commissioner for Transport Antonio Tajani used these additions as an opportunity to repeat a call for the list to be made global, which he had first suggested after the crash of Yeminia Flight 626 earlier this month.

“We cannot afford any compromise in air safety,” he said. “Citizens have the right to fly safely anywhere in the world. It is high time that the international community rethinks safety policy. Those airlines which are unsafe should not be allowed to fly anywhere.”

The only other modification to the list was to Angolan flag carrier TAAG. Previously banned completely, they will now be allowed to fly some of their aircraft into Portugal, with operating restrictions. The move comes after the Portuguese and Angolan civil aviation bodies signed a deal to co-operate to improve safety.

A compilation of brief news reports for Monday, July 8, 2013.