Aurelia Butler

BOGOTA (Reuters) – A tax reform proposed by Colombia’s President-elect Gustavo Petro will raise $10.9 billion annually via a progressive income tax, the elimination of business exemptions, and tackling evasion, his incoming tax agency head said on Thursday.Petro, a leftist who takes office next month on promises of generous social programs, this week named 38-year-old economics professor Luis Carlos Reyes to head the DIAN tax and customs agency.Reyes will be tasked with implementing the 50-trillion-peso reform should it pass congress, where Petro has built a broad coalition of leftist parties and the centrist Liberals.Business leaders and investors are wary of Petro, who took pains to reassure them ahead of the election and named a market-friendly former central banker as his finance minister.”We are very optimistic in relation to the figure of 50 trillion, because there are a number of exemptions for individuals, for companies that we can eliminate. And evasion in Colombia is so high that there is a lot of room to reduce it,” Reyes told Reuters in an interview.Tax exemptions for individuals and businesses set to be eliminated by the reform are equivalent to just under 2% of the country’s $258 billion gross domestic product, Reyes said.Evasion costs the country some $17.6 billion annually, he said. Under the reform evasion will be punished with prison sentences, Reyes added, which are rarely applied now.Anyone earning more than 10 million pesos ($2,194) a month – just 1% of Colombians – will need to progressively pay more in income tax.”No one earning less than 10 million pesos should worry,” he said.Businesses – which currently pay a tax rate of 35% – are likely to see their duties fall unless they currently benefit from exemptions or special tax rates, Reyes said.”The great majority of companies who don’t have any tax benefits will pay less than they are paying now.” Oil and mining companies will lose tax benefits, Reyes added, though details are still being confirmed, while taxes on capital and dividends will also rise.Increased tax revenue could help reduce the fiscal deficit, which hit 7.1% of GDP last year, he said.”Without a reform, there’s no government,” Reyes said. “Colombia needs more income to be able to carry out promises laid out in the constitution.” More

“I hope that our staff team on Argentina, including our resident representative in Buenos Aires, are already engaging with the minister and her technical team,” said Fund spokesman Gerry Rice in a scheduled press briefing.”We welcome efforts to strengthen expenditure controls, tax compliance, and public debt management coordination,” he said.Argentina is the IMF’s largest debtor, with a $44 billion program that was approved by the board in late March.Rice said the objectives of the program remain in place, even amid a very challenging global environment. “We have had a very positive initial engagement with the minister, and we look forward to continuing to work constructively to achieve the agreed objectives,” he said. More

How well did you keep up with the news this week? Take our quiz.Gotabaya Rajapaksa has offered to resign as Sri Lanka president after fleeing to Singapore, having been forced from office by mass protests over his country’s economic collapse. Sri Lanka’s parliamentary speaker said on Thursday evening that Rajapaksa had tendered his resignation from Singapore but that an official announcement would only come on Friday “after the verification process and legal formalities”. Singapore’s foreign ministry had earlier issued a short statement confirming that Rajapaksa had been permitted to enter the city-state on a “private visit”, adding that he had not asked for asylum. Rajapaksa’s delay in tendering his resignation was probably intended, analysts said, with the aim of holding on to diplomatic immunity while he looked for refuge in a country that would take him in.The mass protests in Colombo are among the worst bouts of political unrest seen this year in emerging markets that are feeling the brunt of higher food and fuel prices and tighter credit caused by the war in Ukraine. Thanks for reading FirstFT Asia. Now on with the rest of the day’s news — Emily Five more stories in the news1. Mario Draghi offers to resign as Italy’s prime minister Italy was plunged into political turmoil on Thursday when prime minister Mario Draghi offered to resign after a split in his national unity government. His resignation was quickly rejected by Italy president Sergio Mattarella.2. Celsius Network reveals $1.2bn shortfall in bankruptcy filing The crypto lender has revealed a $1.2bn hole in its balance sheet caused by what chief executive Alex Mashinsky called “poor” investments and other “unanticipated” losses. Celsius made the disclosure as it sought US bankruptcy protection this week, after freezing customer funds in June. Premium subscribers can sign up to our new cryptocurrency email to help guide you through the crash.3. Oil prices drop below $95 for first time since invasion of Ukraine Prices fell on fears of an impending global recession that have gripped commodity markets and battered forecasts for demand. Both main benchmarks for crude shed more than $5 a barrel on Thursday, or more than 5 per cent, adding to a broad rout over the past six weeks.4. TSMC raises revenue outlook but warns on inflation Taiwan Semiconductor Manufacturing Company has raised its revenue outlook despite warning of a cyclical downturn in the chip industry and pressures from soaring inflation. The world’s largest contract chipmaker yesterday forecast $19.8 to $20.6bn revenues in the third quarter, a 35.7 per cent increase compared with last year.5. Panasonic to build $4bn battery plant in Kansas The new facility is expected to create 4,000 jobs and is a gamble on the growing popularity of Tesla cars. The Japanese group, the world’s third-largest producer of electric vehicle batteries behind CATL and LG Energy Solution, already jointly operates a $5bn gigafactory in Nevada with Tesla. The day aheadChina economic data Second-quarter GDP figures along with June retail sales and industrial production data are set to be published. Here are five things to look for in the release of China’s estimate of its Q2 economic growth. Biden heads to Saudi Arabia Joe Biden will arrive in Saudi Arabia with a two-pronged plan to bring down oil prices while still punishing Vladimir Putin. First, convince Riyadh to pump more oil, especially to Europe. Second, cap the price at which Russia can sell its crude.Televised debates on the Tory leadership The five candidates left in the contest will participate in their first televised debate later today, before a second on Sunday. Another voting round among MPs will take place on Monday, when another candidate will be eliminated.US bank earnings Results are expected from Bank of New York Mellon. Citigroup and Wells Fargo. Elsewhere in financial services, BlackRock also reports earnings today. Yesterday JPMorgan Chase and Morgan Stanley reported a bigger-than-expected decline in second-quarter profits that signalled the end of the industry’s pandemic-era earnings boom.Join FT journalists on Friday July 15 at 1pm BST for a virtual briefing for FT subscribers on what awaits Britain and business after Boris Johnson, as rival Conservative candidates battle to succeed him as prime minister. Register for free.What else we’re reading and watching‘Exponentially’ risky China leaves venture capital funds starved of cash Private equity and venture capital managers in China say small and middle-sized groups are facing the greatest fundraising challenges to lock in capital for a decade as global investors are deterred by the tech crackdown, zero-Covid policy and the threat of western sanctions.Can Russia win the war? Days after his troops seized the last city in Luhansk, Vladimir Putin said his war in Ukraine had not started “in earnest yet”. Analysts have predicted that Kyiv has six months to drive out the invading forces before fatigue and a prolonged military gridlock sets in.Opinion: Putin’s stamina for war will test the west’s resolve, writes Lionel Barber.

Where to get char siu in Hong Kong Char siu, or Chinese barbecue pork, is a traditional dish from the Canton region that has made its way on to the menus of most restaurants in Hong Kong. The beloved comfort food can be found almost everywhere in the city, from fast-food eateries to Michelin-starred restaurants. Here are four of the best.Web3: a new serving of old crypto nonsense Web3 is the inexorable destiny of the internet — the magical fabric from which blockchain-based decentralised dreams are made and dystopian Big Tech nightmares destroyed. But look beneath the surface and gaping holes appear in this vision, writes Jemima Kelly.Video: what’s next for scandal-hit Credit Suisse? The Swiss lender’s story is one of high-profile scandals, from corporate espionage to cocaine smugglers, and about how finance went wrong at one of the most important banks in Europe. Credit Suisse’s new chair, Financial Times reporters and banking industry experts look at what could come next. Readers respond Earlier this week I asked if you thought Elon Musk should be compelled to honour his deal with Twitter. Here’s what readers had to say: “Absolutely Twitter should sue and Delaware should uphold the law . . . [Elon Musk] and Trump are the most insane abusers of Twitter and while their business model must change, this is not the way to achieve that.” — Margit Pearson, New York“I’m a bit torn, on one hand I don’t want Musk to own Twitter, but on the other he thinks himself to be above the law so he should be put in his place . . . ” — Reader JmJa More

(Reuters) -Trading activity by Federal Reserve Chair Jerome Powell and former Vice Chair Richard Clarida violated no rules, the Fed’s independent watchdog said on Thursday, putting an apparent end to one chapter in an ethics scandal that embroiled the central bank last year. “Based on our findings, we are closing our investigation” into the pair’s investment activities from 2019 to 2021, the Office of the Inspector General said. A separate investigation into the two regional Fed bank presidents whose investments touched off the public outcry to begin with is ongoing, it added, signaling that at least one more chapter in the saga remains to be written. The four-page memo posted to the OIG’s website was the result of a nine-month investigation by the independent watchdog following the disclosure last September that Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren had been actively engaged in the financial markets in 2020. That was the year the central bank launched a barrage of rescue programs and bond purchases to stem the economic fallout from the pandemic, and critics raised questions about potential conflicts of interest and propriety. Both policymakers said they complied with then-current ethics rules. Both then retired early. Powell requested an independent probe, and set about revamping rules around Fed policymaker trading and investment.Powell’s own investment portfolio came under scrutiny, and Clarida drew separate public fire in late December after he corrected a previous financial disclosure to show he traded in a stock fund in February 2020 as the Fed was about to intervene in markets. The inspector general said it reviewed relevant records, Board email accounts, financial disclosure reports, brokerage statements and other trading data, as well as conducted interviews with “relevant individuals” as part of its investigation.It did find that Clarida failed to report several trades on required disclosure forms and that a financial adviser for the Powell family trust executed five trades during the sensitive period around a Fed policy-setting meeting, when trading is not allowed.But “we did not find evidence to substantiate the allegations that former Vice Chair Clarida or you violated laws, rules, regulations, or policies related to trading activities as investigated by our office,” the OIG said in the memo, dated July 11 and addressed to Powell.Clarida said the watchdog “determined conclusively that I did not violate any statutes, rules, regulations, or standards.” Clarida left his post in January, a couple of weeks before his term was up.“He did not act with inside information. That’s exactly what they were looking for, exactly the purpose of the investigation,” said Tony Fratto, a Clarida spokesperson. Better Markets, a nonprofit advocating stronger financial regulation, said the report missed the mark, charging that its scope of review was too narrow and that it was not credible because the inspector general is hired by the Fed chair, rather than independently appointed. The Fed early this year adopted an extensive set of restrictions on trading by policymakers and senior Fed staff to prevent any future issues, barring among other things any trading during periods of market stress and banning the holding of individual bonds and the purchase of individual stocks. More

NUSA DUA, Indonesia (Reuters) – G20 finance leaders meet on Friday on the resort island of Bali, as host Indonesia tries to find common ground in a group frayed by the Ukraine war amid rising economic pressures from soaring inflation. Russia’s invasion of Ukraine, which the Kremlin calls a “special military operation”, has overshadowed previous meetings by the Group of 20 major economies, including last week’s gathering of foreign ministers. Indonesia’s President Joko Widodo told World Bank representatives in a meeting in Jakarta that he hopes G20 members “could put out a communique” after concluding their gathering on Saturday, according to his planning minister.G20 members include Western countries that have imposed sanctions on Russia and accuse it of war crimes in Ukraine – which it denies – as well as nations like China, India and South Africa, which have been more muted in their responses.German and French officials have expressed scepticism that common ground can be reached due to the tensions over Ukraine. U.S. Treasury Secretary Janet Yellen on Thursday said the war was causing a negative spillover globally and Russian officials had no place at the G20 meeting. Yellen dodged a question about whether she would walk out when Russian officials spoke, however, but said she would condemn Russia’s invasion “in the strongest possible terms”. Ukraine’s finance minister is expected to speak at one of the sessions virtually, Indonesia said. Russian Finance Minister Anton Siluanov will address the meeting virtually, with his deputy travelling to Bali.Russian Foreign Minister Sergei Lavrov walked out of one session of a meeting with his counterparts in Bali last week, following what he called “frenzied criticism” of his country at a forum he said should have focused on global economic problems.That meeting ended without a communique nor any announcements of agreements. Indonesia has said it wants the meeting to come up with actions to tackle a looming food crisis that would hit poor countries the most. Yellen said one of her key objectives was to push G20 creditors, including China, to finalise debt relief for countries in debt distress. More