Tag Archives: Greece

Ecuador President Announces One-Time Tax On Millionaires, Workers After Earthquake

From an Associated Press article on the Fox News Latino website Thursday:

President Rafael Correa announced Wednesday night that he is raising sales taxes and will charge a one-time levy on millionaires to rebuild cities devastated by Ecuador’s worst earthquake in decades…

Using authority granted by the state of emergency he declared after Saturday night’s quake, Correa said sales taxes would increase to 14 percent from 12 percent for the coming year.

People with more than $1 million in assets will be charged a one-time tax of 0.9 percent on their wealth, while workers earning over $1,000 a month will be forced to contribute a day’s wages and those earning $5,000 a month the equivalent of five days’ pay.

Taxes on companies will also go up…

(Editor’s note: Bold added for emphasis)

A “just” tax in the aftermath of a natural disaster? Wealth confiscation for a “just cause”? Just plain wealth confiscation?

Spanish international news agency Agencia EFE reported on the Fox News Latino site back on March 20 the Ecuadorian government was already seeking to hike taxes prior to the quake. From that piece:

Ecuador’s government is working on a reform package that will raise the taxes on cigarettes, alcoholic beverages and soft drinks to cover the budget deficit created by the drop in the price of oil, the Andean nation’s top export product, President Rafael Correa said.

“The price of petroleum keeps dropping” and the government must make “certain adjustments,” Correa said during his weekly show on Saturday…

(Editor’s note: Bold added for emphasis)

“Sin tax” hikes. Sounds like what’s routinely proposed/passed in my neck of the woods (Chicago).

If Ecuador follows through with this tax on millionaires and workers, some will be wondering if other governments won’t be following its implementation closely to serve as a model for a future “state of emergency” of their own.

Like a sovereign debt crisis, for example.

At the same time, I wonder what this could mean for bank safe deposit boxes (I don’t know of any private, non-bank safe deposit box facilities in Ecuador)? Will Ecuadorian government officials inspect secured containers belonging to suspected millionaires/millionaires suspected of under-reporting the value of their assets, in an attempt to ensure compliance with the announced tax levy?

Would box holders find themselves in a situation similar to what was announced in Greece last fall?

I blogged back on November 6, 2015:

Just when the reputation of bank safe deposit boxes couldn’t get any worse comes this out of Greece. Anthee Carasavva reported on The Times (UK) website back on October 12:

Greece’s government is raiding savers’ safe deposit boxes to raise revenue and stamp out tax evasion.

Tryfon Alexiadis, the deputy finance minister, said yesterday that Greeks owing more than €150,000 in back taxes would be targeted. Those suspected of tax evasion would also come under scrutiny and their bank deposit boxes prised open without notice

“Safe deposit boxes across the country will be subject to these inspections immediately,” Mr Alexiadis told an Athens-based TV network…

(Editor’s note: Bold added for emphasis)

I added later:

Regarding that bit about tax evasion suspects, Mark Yaxley of Cayman Islands private vault Strategic Wealth Preservation penned back on October 20:

The government’s justification is that they’re chasing tax evaders, stating that they’re targeting those who owe more than €150,000 in back taxes. However, they have also revealed that they will target any boxes held by those who are “suspected” of tax evasion and, since literally anyone can become a suspect at any moment, without having to be charged with a crime, inspectors will have the authorisation to decide on the spot that a box holder is “suspected” of tax evasion

(Editor’s note: Bold added for emphasis)

It was reported Greek tax inspectors would be allowed to open bank safe deposit boxes and confiscate as much as half of the cash they found. Stocks, bonds, jewelry, and works of art would be confiscated in their entirety.

Stay tuned…

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

Sources:

“Ecuador to hike sales tax to help rebuild cities devastated by earthquake.” Associated Press. 21 Apr. 2016. (http://latino.foxnews.com/latino/news/2016/04/21/ecuador-to-hike-sales-tax-to-help-rebuild-cities-devastated-by-earthquake/?intcmp=obinsite). 21 Apr. 2016.

“Ecuador plans to hike taxes on cigarettes, alcohol and soft drinks.” Agencia EFE. 20 Mar. 2016. (http://latino.foxnews.com/latino/politics/2016/03/20/ecuador-plans-to-hike-taxes-on-cigarettes-alcohol-and-soft-drinks/). 21 Apr. 2016.

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Greeks Instructed To Declare Cash, Jewelry, And Precious Stones Stashed ‘Under The Mattress’

One topic I regularly talk about on Offshore Safe Deposit Boxes is the growing threat of wealth confiscation by governments around the world. This phenomenon is something I’ve been cataloging on the “Why Offshore Private Vaults?” page on my website of the same name. The latest entry reads:

Greece, October 2015, announcement by deputy finance minister Tryfon Alexiadis that bank safe deposit boxes belonging to Greeks owing more than €150,000 in back taxes and those suspected of tax evasion would be opened. Tax inspectors will be allowed to confiscate as much as half of any cash found, and stocks, bonds, jewelry, and works of art will be confiscated…

I believe Greece is a litmus test for governments looking to trod down the path of personal asset confiscation in a financial crisis. As such, I pay particular attention to the Greek sovereign debt turmoil as part of my offshore asset protection research. And here’s something I spotted late last night on the CNBC website that bears watching. Matt Clinch reported Wednesday:

Greek politicians, journalists, and civil servants are being asked to declare any large sums of cash or precious metals they may have stashed at home as part of the overhaul of the country’s tax returns.

First reported by the Greek business news website Enikonomia.gr, the new addition to the rules mean Greeks will have to declare any cash holdings above 15,000 euros ($15,888) – outside of a bank – and any jewelry and precious stones worth over 30,000 euros.

The rules only apply for the whole household and will come into effect on January 1, 2016. It forms a “joint ministerial decision” by the Ministry of Justice and Finance, according to Enikonomia.gr, and sets out a new category of Greece’s online tax declaration, called the “assets declaration.”

The tax form – posted on the Enikonomia.gr website – also states that the decisions on the new tax declarations have been taken for the “support and development of the Greek economy.” It also highlights that this new assets declaration process will initially apply to just lawmakers, journalists, and public servants but could be extended to all taxpayers

(Editor’s note: Bold added for emphasis)


“Greeks must now declare THIS in tax returns”
CNBC Video

Theoretically, this new “tax self-assessment”- as Clinch called it- might raise much-needed revenue for government coffers.

In reality, I have my suspicions not many Greeks will declare assets held outside of the banking system.

What will the Greek government do then? Carry out an aggressive program of wealth confiscation against its own citizens? Fellow bloggers and others snicker at such an initiative, but I’ve thought about how it could be accomplished and it’s actually quite easy to do.

Stay tuned…

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

Source:

Clinch, Matt. “Greeks told to declare THIS in their tax returns.” CNBC.com. 2 Dec. 2015. (http://www.cnbc.com/2015/12/02/). 4 Dec. 2015.

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Greece’s Government Confiscating Contents Of Bank Safe Deposit Boxes?

“Almost three months after total access to bank safe deposit boxes and their contents was restored by the Greek government, I can’t help but think that confidence in these containers stored in financial institutions has got to be shredded…”

Offshore Safe Deposit Boxes, October 9, 2015

Just when the reputation of bank safe deposit boxes couldn’t get any worse comes this out of Greece. Anthee Carasavva reported on The Times (UK) website back on October 12:

Greece’s government is raiding savers’ safe deposit boxes to raise revenue and stamp out tax evasion.

Tryfon Alexiadis, the deputy finance minister, said yesterday that Greeks owing more than €150,000 in back taxes would be targeted. Those suspected of tax evasion would also come under scrutiny and their bank deposit boxes prised open without notice

“Safe deposit boxes across the country will be subject to these inspections immediately,” Mr Alexiadis told an Athens-based TV network…

(Editor’s note: Bold added for emphasis)

I haven’t heard much more about this development since the statement was made. However, I have come across some commentary on the situation. Equities expert Dennis Miller said on Equities.com this past Tuesday:

The Times reports (link firewall protected) the government is proposing the idea prying open the safety deposit boxes of suspected tax cheats. “Under the unprecedented measure, tax inspectors will be allowed to open bank boxes and confiscate as much as half of the cash they find. Stocks, bonds, jewelry and even works of art will be confiscated in their entirety.” 70% of the Greek population is reportedly in favor of the idea. My guess is a “suspected tax cheat” is anyone with a safety deposit box

(Editor’s note: Bold added for emphasis)

Regarding that bit about tax evasion suspects, Mark Yaxley of Cayman Islands private vault Strategic Wealth Preservation penned back on October 20:

The government’s justification is that they’re chasing tax evaders, stating that they’re targeting those who owe more than €150,000 in back taxes. However, they have also revealed that they will target any boxes held by those who are “suspected” of tax evasion and, since literally anyone can become a suspect at any moment, without having to be charged with a crime, inspectors will have the authorisation to decide on the spot that a box holder is “suspected” of tax evasion

(Editor’s note: Bold added for emphasis)

If I was a financial institution that received substantial revenue from safe deposit box rentals, I might be a little pissed at certain Greek financial officials right now. Potential box renters are bound to think twice about keeping valuables in a bank safe deposit box when merely the suspicion of being a tax cheat could lead to confiscation of personal belongings in that secured container. Less rentals equals decline in revenue.

Greece now, who next?

Stay tuned…

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

Sources:

Carassava, Anthee. “Athens to raid bank safes of tax cheats.” The Times. 12 Oct. 2015. (http://www.thetimes.co.uk/tto/news/world/europe/article4582794.ece). 6 Nov. 2015.

Miller, Dennis. “Saving Money Against the Illusion of Safety.” Equities.com. 3 Nov. 2015. (http://www.equities.com/editors-desk/personal-finance/retirement/saving-money-against-the-illusion-of-safety). 6 Nov. 2015.

Yaxley, Mark. “SWP Alert – Greek Government to Begin Looting Safe Deposit Boxes.” Strategic Wealth Preservation. 20 Oct. 2015. (http://www.swpcayman.com/news/greek-looting-safe-deposit-boxes.php). 6 Nov. 2015.

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